Palantir Leads Tech Stock Decline As Intel Surges

Megacap tech stocks retreated sharply on Tuesday, 19 August, as risk appetite waned in the lead-up to the Jackson Hole Symposium. Palantir (PLTR) slumped 9% after renowned short-seller Citron Research released a note reiterating its bearish view on the stock.

Shares of US chip giant Intel (INTC) bucked the trend, jumping 7% on news of a $2 billion investment by SoftBank (9984.TY). Tuesday’s gains reversed a 3.6% decline in the stock on Monday, amid reporting a 10% investment by the Trump administration.

TL;DR

• Palantir (PLTR) sank 9%, its fifth straight decline and the S&P 500’s worst performer, after Citron Research called its valuation “super disconnected from fundamentals.”

• Intel (INTC) jumped 7% on news of a $2B SoftBank investment, reversing Monday’s 3.6% drop; shares are up 23.6% over the past week, the best since January 2000.

• Broader weakness hit megacap tech stocks as investors pulled back from crowded AI trades ahead of Friday’s Jackson Hole symposium speech.

• The S&P 500 fell 0.59% to 6,411.37, the Nasdaq slid 1.46% to 21,314.95, while the Dow eked out a 10-point gain to 44,922.27 on signs of rotation into value stocks.

Tech Stocks Lead Sell-Off

Palantir’s tumble ranked it as the S&P 500’s worst performer, but it was far from the only faller on Tuesday. Nvidia (NVDA) fell 3.5%, while AMD (AMD) and Broadcom (AVGO)  slid 5.4% and 3.6%, respectively, as megacap tech and chipmakers came under heavy selling pressure.

A general bout of risk aversion manifested as a pullback from the ‘AI trade’ as investors reassessed positions ahead of key macro events, including Friday’s Jackson Hole Symposium speech by Federal Reserve Chair Jerome Powell. Analysts suspect Powell could signal the Fed will begin cutting US interest rates as soon as September.

On Tuesday, the S&P 500 fell 0.59% to 6,411.37, and the tech-heavy Nasdaq slid 1.46% to 21,314.95. Notably, the Dow rose 10 points to 44,922.27, supported by signs of rotation out of growth and into value stocks. (Source: CNBC)

Palantir Slides for Fifth Day

The latest note from Citron Research argued Palantir’s valuation is “super disconnected from its fundamentals” and likened the stock to the dot-com bubble.

That call comes just two weeks after Palantir shares jumped on the back of record second-quarter earnings. Revenue was up 48% year-on-year to hit $1 billion for the first time, and the company raised its full-year outlook on strong demand for its AI platform.

Despite still being up a whopping 111% year-to-date, after a 5-day sell-off, Palantir shares at $158.36 are now more than 15% below their 52-week high of $186.97. (Source: Yahoo Finance)

Intel Back to DotCom Era Gains

SoftBank’s announcement of a $2 billion investment (roughly a 2% stake) in Intel late Monday has been framed as a joint commitment to US semiconductor innovation by the Japanese investment conglomerate. There has been no official confirmation of the potential 10% investment by the US government.

The company’s fortunes have flipped sharply in recent weeks, with last week’s 23.6% surge marking Intel’s best weekly gain since January 2000. Earlier in the month, the company had been under political pressure, including a call from President Donald Trump for CEO Lip-Bu Tan to resign but Intel now appears to have the administration’s backing following Tan’s visit to the White House.

Conclusion

Tuesday’s session was marked by sharp losses in megacap tech and chipmakers, led by Palantir’s 9% slump and declines in Nvidia, AMD, and Broadcom. Intel stood out with a 7% rally on SoftBank’s $2B investment, helping the Dow finish slightly higher even as the S&P 500 and Nasdaq closed lower. 

The moves underscored a rotation out of crowded AI trades and into value stocks ahead of this week’s Jackson Hole Symposium.

*Past performance does not indicate future results. The above are only projections and should not be taken as investment advice.