Palantir Technologies Inc. (PLTR) caught a break Friday morning, rising in premarket trading after a punishing Thursday session that saw shares drop nearly 7%. The rebound mirrors a broader market attempt to shake off what's shaping up to be a historic reckoning for the software industry.

Markets Attempt a Morning-After Recovery

U.S. futures pointed toward a positive open across the board Friday morning. S&P 500 futures climbed 0.42% to 6,849.50, while Nasdaq-100 futures gained 0.49% to 24,770.75. The Dow Jones Industrial Average futures advanced 0.44% to 49,212.00, suggesting investors are ready to at least pause the selling pressure.

The Software Apocalypse Nobody Saw Coming

Here's where things get interesting. Wedbush analyst Dan Ives told Bloomberg on Thursday that Wall Street is witnessing a software selloff "unlike anything" he's seen in 25 years. That's not hyperbole from a junior analyst—that's a veteran watching the industry get absolutely hammered.

The market is treating established giants like Salesforce Inc. (CRM), ServiceNow Inc. (NOW), and Microsoft Corp. (MSFT) as if they're suddenly irrelevant in the age of AI. Ives put it bluntly: current valuations don't just assume these companies will miss Wall Street estimates—they assume actual revenue declines over the next few years.

"You have to assume that they're not just taking the street numbers. You have to assume that they're actually declining the next few years," Ives explained. The math suggests the market is pricing in scenarios where some software companies could lose roughly 5% of their customer base.

But here's the plot twist: Ives called out Palantir as "a prime example of how software can still make it in today's age," even as AI disrupts everything around it. That's notable praise during what amounts to an industry-wide panic attack.

The Irony of Palantir's Slide

The timing is almost comical. Palantir recently slid back to July lows despite CEO Alex Karp declaring the company's fourth-quarter earnings "indisputably the best results that I'm aware of in tech in the last decade." When your CEO is throwing around superlatives like that and the stock still tanks, you know something bigger is happening in the market.

What Analysts Expect Next

Investors are now looking ahead to Palantir's next earnings report scheduled for May 4, 2026. The expectations are substantial:

• EPS Estimate: 23 cents per share, up from 13 cents year-over-year
• Revenue Estimate: $1.54 billion, jumping from $883.86 million year-over-year
• Valuation: Currently trading at a P/E ratio of 206.4x, indicating the market still prices in significant premium despite recent volatility

The Analyst Scorecard

Wall Street analysts maintain a Hold rating on Palantir with an average price target of $161.63. Recent moves show the typical analyst confusion you'd expect during turbulent times:

• DA Davidson: Neutral rating, lowered price target to $180.00 (February 3)
• Citigroup: Buy rating, raised price target to $260.00 (February 3)
• UBS: Neutral rating, lowered price target to $180.00 (February 3)

That's quite a spread—Citigroup at $260 versus the two Neutral ratings at $180. Someone's going to look very smart or very wrong in a few months.

Friday's Price Action

As of Friday morning premarket trading, Palantir shares were up 4.43% at $135.77. Whether this represents a genuine turnaround or just a temporary relief rally remains to be seen. But in a market where software stocks are being valued like they're on the verge of obsolescence, any green on the screen probably feels pretty good to Palantir shareholders.