Palantir stock sinks below a key technical level, extending a steep two-day drop. History suggests buying the dip could pay off—big.

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Palantir stock (NASDAQ: PLTR) took a sharp hit on Wednesday, falling about 7% as high-valuation tech stocks pulled back across the market. The AI and data analytics company had hit record highs earlier in the month,

Palantir Technologies was the worst performer in the S&P 500 on Tuesday, with the stock continuing to surrender gains following a blowout earnings report earlier this month.

Tech stocks were under pressure this week as Wall Street’s AI enthusiasm slowed and investors adjusted portfolios after a strong summer rally.

Palantir Technologies on Monday raised its annual revenue forecast for the second time this year, expecting sustained demand for its AI-linked services from businesses and governments.

Palantir shares have fallen nearly 20% over the past two days following a large post Q2 earnings rally earlier this month. Learn more on PLTR stock here.

Short-seller Citron targets PLTR again, using a Databricks comparison to argue the stock is overvalued after its report sent shares falling.