AI software firm Palantir saw strong quarterly revenue, but its price-to-earnings ratio could be a warning sign for investors.

Two hedge fund managers with a track record for market beating returns sold Nvidia and bought Palantir in the second quarter.

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's growth continues to be led by U.S. commercial customers adopting its Artificial Intelligence Platform (AIP). The company once again credited AIP's ontology, saying it is "pure understanding," and that without it, large language models (LLMs) cannot actually work in the real world

Catch and Revoke” is said to be AI driven technology that combines social media monitoring, visa status tracking, and automated threat assessments of foreign individuals on visas,

Tech workers are also increasingly determined to hold their workplaces accountable for enabling the genocide in Gaza.

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.