Palantir Technologies has created one of the most dramatic stories on Wall Street this year, defying conventional investment narratives. In 2025, it became the top-performing stock in the S&P 500, surging over 106% and at points climbing 144% from the start of the year—outpacing even AI heavyweights like Nvidia.

Palantir Technologies was the worst performer in the S&P 500 on Tuesday, with the stock continuing to surrender gains following a blowout earnings report earlier this month.

Palantir stock fell for the sixth straight session on Wednesday. With the retreat, Palantir stock is down 18% from its all-time high.

In recent days, Palantir's stock has been showing signs of slowing down. After hitting a new all-time high of $190 on Aug. 12, it has proceeded to trade lower. By Monday, the AI stock would close at just over $174 -- down 8% from its recent high.

The sudden reversal shows how the hottest AI trade and top-performing stock of the year is colliding with a broader market rotation out of big tech.

Palantir's price-to-sales ratio of 114 is way above OpenAI's 17. Palantir's success in defense work could block access to growth as enterprise AI payoff remains elusive

The heaviest weight on the market was Nvidia, whose chips are powering much of the move into AI. It sank 3.5%.

U.S. stock indexes ended mixed after Nvidia, Palantir and other superstar stocks pared most of their steep losses from the morning.