Key Points
Palantir stock has suffered a dramatic sell-off over the last few weeks thanks to the ongoing "SaaSpocalypse."
Palantir shares recently witnessed some newfound buying, but this momentum could be fleeting.
Palantir is riding the wave of a fluid situation in Iran, making it a risky buy at this exact moment.
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After being one of the top stocks in the Nasdaq-100 index over the last couple of years, shares of Palantir Technologies (NASDAQ: PLTR) are down 14% so far in 2026. However, shares rocketed nearly 12% over the last five trading days -- giving growth investors a small glimmer of hope during the ongoing "SaaSpocalypse."
Let's take a look at both the headwinds and tailwinds facing Palantir to help understand what's going on with the stock.
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Why did Palantir's stock fall in February?
In early February, Palantir reported fourth-quarter earnings. Despite explosive growth across revenue and profit, shares of Palantir have traded sideways since the company published its full-year 2025 report. The main drag on Palantir stock over the last several weeks has more to do with macroeconomic drawdowns as opposed to anything specific to the company. Namely, large-cap software-as-a-service (SaaS) stocks crashed after Anthropic's Claude model released a number of new plugins that mimic the capabilities of incumbent enterprise software platforms.
Why is Palantir stock rising right now?
The Department of Defense is a known power user of Palantir's software. In the ever-changing world of geopolitics, perhaps the most fluid situation right now surrounds the Middle East.
While I cannot say whether the U.S. military is leveraging Palantir to carry out its operation in Iran, the broader theme is that investors are using the war as a proxy catalyst given the company's long-standing ties to the Pentagon.
Should you buy Palantir stock?
Investing in a defense company during a time of conflict is largely speculative. One day, the stock rises on so-called war demand, only to retreat the next day as details around the situation unfold.
In general, I do not encourage investing in momentum stocks. When it comes to geopolitical tensions, I double down on my hesitancy. Right now, Palantir's stock movements are likely being influenced by short-term day traders riding the volatility of the Iran narrative.
While I do like Palantir as a long-term artificial intelligence investment, there will be more prudent opportunities to buy the stock during periods of lower uncertainty.
Should you buy stock in Palantir Technologies right now?
Before you buy stock in Palantir Technologies, consider this:
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Adam Spatacco has positions in Palantir Technologies. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
