Indeed, I reviewed 70+ software stocks and found only seven others that achieved a price-to-sales (PS) ratio above 100 during the last 20 years. All seven stocks eventually crashed, falling at least 65% after reaching their peak valuation. The average decline was 79%, as detailed below:
- Strategy peaked at 242 times sales in July 2025 and dropped 65% by December 2025.
- Snowflake peaked at 222 times sales in December 2020 and dropped 73% by September 2024.
- SentinelOne peaked at 148 times sales in September 2021 and dropped 83% by June 2023.
- Zoom Communications peaked at 123 times sales in October 2020 and dropped 90% by June 2024.
- Cloudflare peaked at 114 times sales in November 2021 and dropped 83% by November 2022.
- SoundHound AI peaked at 111 times sales in December 2024 and dropped 70% by April 2025.
- Bill Holdings peaked at 103 times sales in September 2021 and dropped 89% by April 2025.
There is more bad news. Cloudflare is the only stock listed above to reach a new high after achieving its peak PS multiple. The other six are still down at least 44% from their record highs, and three are still down at least 80%.
Here's the bottom line: History says Palantir stock will eventually fall 79% from its peak valuation. At present, its peak valuation happened in August 2025, when the stock traded at 137 times sales and $187 per share. From that point, a 79% drawdown implies a future price of $39 per share.
