The Dow Jones index dropped Thursday after surprise initial jobless claims. Walmart falls as Palantir seeks direction.

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Palantir Technologies Inc (NASDAQ:PLTR) shares are trading lower Wednesday as the stock continues to pull back following a strong run in recent weeks. Here's what you need to know.

Andrew Left argues that investors have overhyped Palantir stock, and its valuation pales in comparison to a true AI leader like OpenAI.

In recent days, Palantir's stock has been showing signs of slowing down. After hitting a new all-time high of $190 on Aug. 12, it has proceeded to trade lower. By Monday, the AI stock would close at just over $174 -- down 8% from its recent high.

Palantir Technologies shares have has become a focal point of market debate in recent sessions. A new short-seller report clashes with bullish catalysts from government and enterprise sectors.

The stock has climbed 2.5x since early January and now trades at around $185 per share. After such a rapid ascent, should investors holding sizable gains cash out?

However, since hitting a record closing high of $186.97 on August 12, the stock on Tuesday was on track for a five-day losing streak and its worst day since May 6. As of 1500 ET, PLTR's class A shares were -9.48% at $157.53.

Among the Nasdaq 100 stocks, Analog Devices ADI and Palo Alto Networks PANW rallied 3.7% and 1.6%, respectively, making them some of the best performers at the market open. On the downside, Intel INTC and Micron Technology MU tumbled 4.1% and 3.6%, respectively.

While the operational momentum is clearly solid, investors should pay closer attention to the risks. History shows Palantir stock can fall hard as sentiment shifts.