What Happened?
Shares of data analytics company Palantir Technologies (NASDAQ: PLTR) jumped 4.8% in the afternoon session after cooler-than-expected inflation data reignited hopes for Federal Reserve interest rate cuts.
The November Consumer Price Index (CPI), a key measure of inflation, rose 2.7% year-over-year, coming in below economists' expectations of a 3.1% increase. Similarly, "core" inflation, which excludes volatile food and energy prices, rose 2.6%, beating the consensus forecast of 3.0%. This encouraging report meant that inflationary pressures were easing more quickly than anticipated.
As a result, investors grew more optimistic that the Federal Reserve would have the flexibility to cut interest rates in the near future. Lower interest rates generally reduce borrowing costs for companies and can make stocks, particularly growth-oriented tech shares, more attractive to investors.
After the initial pop the shares cooled down to $185.94, up 4.6% from previous close.
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What Is The Market Telling Us
Palantir Technologies’s shares are extremely volatile and have had 45 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 4.9% as concerns grew over lofty valuations and the uncertain profitability of artificial intelligence investments.
The sell-off, which dragged Wall Street toward a fourth consecutive day of losses, was fueled by investor apprehension about whether the high prices of AI stocks were justified. Questions mounted about how quickly the massive investments in AI will translate into substantial profits. A recent UBS survey highlighted these concerns, finding that only 17% of large businesses were using AI projects at scale. This data hinted that expected revenue growth from AI products might be more subdued than previously anticipated, prompting a broad reevaluation of the sector.
Adding to the concern, reports revealed that a critical $10 billion funding deal between cloud giant Oracle and Blue Owl Capital for a Michigan data center stalled. While Oracle disputed the narrative, claiming they selected a different equity partner, the reported reason for Blue Owl's exit sparked widespread anxiety: concerns over Oracle's ballooning debt and "unfavorable" terms. As a result, investors grew increasingly concerned that hyperscalers were relying more on risky private equity structures to build infrastructure rather than using their own capital.
Palantir Technologies is up 147% since the beginning of the year, but at $185.94 per share, it is still trading 10.3% below its 52-week high of $207.18 from November 2025. Investors who bought $1,000 worth of Palantir Technologies’s shares 5 years ago would now be looking at an investment worth $7,160.
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