Palantir Leads Tech Stock Slide: 52% Of Retail Investors Say No AI 'Bubble'

Benzinga
2025.08.20 16:04
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Palantir Technologies, Inc. (NASDAQ:PLTR) leads a decline in tech stocks, with a recent poll indicating 52% of retail investors believe the AI boom is not a bubble. Despite this sentiment, Palantir shares have dropped over 20% in five days, influenced by profit-taking and skepticism about valuations. Other tech stocks, including NVIDIA and AMD, also fell. Investors are cautious ahead of the Federal Reserve's economic policy event, but retail sentiment may support a rebound if seen as a buying opportunity.

Many large tech stocks are falling this week, led lower by retail darling Palantir Technologies, Inc. PLTR. Has the recent surge in AI stocks gone too far, too fast?

AI Bubble?

A recent poll of Benzinga readers showed that the majority of retail investors reject the idea that the AI boom represents a bubble.

The poll asked retail investors if the market is in an Al-led bubble or is Al an opportunity for expansion? Here are the results:

  • 52% said Al is the future, no bubble.
  • 29% said the market is in an Al bubble.
  • 18% said they are not sure.

The results show that most individual investors believe that AI will lead to further growth, but the recent pull-back in tech cannot be denied.

Tech Stocks Sink

Last week, Citron's Andrew Left announced a short position against Palantir, suggesting that the stock was "beyond overvalued" at nearly $190 per share. Citron later argued that Palantir stock should be trading at $40.

Palantir shares continued to plummet on Wednesday and were down more than 20% over the past five days.

Semiconductor stocks like NVIDIA Corp. NVDA, Micron Technology, Inc. MU and Advanced Micro Devices, Inc. AMD were down dramatically. Shares of Dell Technologies, Inc. DELL and Taiwan Semiconductor Manufacturing Co. TSM also followed lower.

What's Going On?

Tech stocks are under pressure from several factors: profit-taking following recent steep rallies, skepticism about valuations and concerns about government policy as the Trump administration eyes a stake in Intel Corp. INTC

Markets are also showing caution ahead of the Federal Reserve's economic policy event at Jackson Hole later this week. Investors will be watching Fed Chair Jerome Powell‘s remarks for clues about future rate cuts, the impact of tariffs on inflation and labor market trends.

What's Ahead?

The resilience of retail sentiment could provide support for tech stocks in the days ahead if investors see the pull-back as an opportunity to "buy the dip."

If revenues across leading firms continue to validate growth narratives, this pullback could be remembered as a temporary breather, not the bursting of an AI bubble.

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