Palantir $PLTR stayed above its all-time high for just three trading sessions and is now heading into a correction.
Shares are down more than 7% today, wiping approximately $34 billion off the company’s market value.
The sell-off has hit the entire software sector. 43 tech companies have collectively lost more than $260 billion.
About $83 billion of that is attributable to $MSFT. The $IGV ETF is down nearly 5% and has erased all of its gains this year. Cybersecurity companies are faring even worse, with $PANW and $CRWD down around 18% this week.
Concerns about competition have been revived by reports that OpenAI is in talks to acquire security firm Trail of Bits.
Valuation remains the main risk for Palantir. Revenue grew 93% in the second quarter, but even after Friday’s decline, the shares are trading at roughly 55 times the annual revenue the company projected in August.
I sold my position several months ago, when it was above $100. I have no plans to get back in.