(Reuters) -Palantir Technologies fell more than 8.3% in premarket trading on Tuesday, as another strong quarterly update from the company failed to extend its record-breaking rally, setting it on track for its worst single-day loss since mid-August.
The company, which has more than doubled in value this year, forecast fourth-quarter revenue above market expectations on Monday, driven by a rapid AI adoption boosting demand for its data analytics services.
The company's stock has been riding on its strong
relationship with the U.S. government after it won a slew of contracts, including using Palantir's data and AI technology in defence work.
Its shares are up more than 170% so far this year, after having surged around 1,000% in the past two years, sharply outpacing tech firms including Big Tech and AI giants Microsoft, Amazon and Alphabet.
Palantir has emerged as a retail favorite over the years, with daily retail cash turnover of about $302 million as of last close, the third highest among U.S.-listed shares that Vanda Track Research monitors.
If current losses hold, the company is set to erase around $41 billion from its market value.
Palantir trades at nearly 250 times its 12-month forward earnings estimates, compared with AI chip frontrunner Nvidia's 33 and Microsoft's 29.92
(Reporting by Zaheer Kachwala in Bengaluru and Danilo Masoni in Milan; Editing by Amanda Cooper and Arun Koyyur)
