Palantir Technologies Inc. shares fell more than 6% ahead of its second-quarter earnings report.
Investors cited high valuation, recent insider sales, and scrutiny over the UK National Health Service contract as primary drivers. The company maintains strong revenue growth within its U.S. government contracts.
Rising competition in the artificial intelligence sector contributed to the cautious market sentiment. Citigroup lowered its price target for Palantir to $200 from $225.
The bank maintained its buy rating despite the adjustment. The upcoming earnings release will test if the company can justify its premium valuation.