Palantir Technologies stock has surged 147% year-to-date, making it the top-performing stock in the S&P 500. Despite its impressive growth, Palantir’s valuation is raising concerns similar to those seen during past stock market bubbles. Institutional investors are showing signs of pulling back on buying activity.

Palantir has disrupted traditional valuation metrics with a market cap of $444 billion and a price-to-sales ratio of 137, far exceeding its SaaS peers. While some argue that Palantir’s true value isn’t captured by conventional metrics, concerns about its valuation persist. A potential reversal in the stock’s trajectory could be on the horizon.

Institutional buying and selling trends in Palantir stock since its IPO reveal a convergence, indicating a possible inflection point. Retail investors may be overlooking this dynamic, potentially setting the stage for a significant share price correction. Institutional portfolio rebalancing could further pressure the stock.

With concerns about Palantir’s valuation mounting, a potential market correction could be on the horizon. Retail investors should be aware of the risks associated with holding the stock, especially as institutional investors may trim their exposure. The stock’s current pricing relative to peers suggests a valuation reset may be imminent.

Read more at Yahoo Finance: History Shows That Palantir Stock’s Monster Run Is Speeding Toward an Epic Crash — and It All Might Come Down to 1 Detail That No One Is Talking About