Shares of Palantir Technologies Inc. (PLTR) plunged 5.9% on Monday, as the AI frenzy that had propelled the stock to remarkable heights in 2024 appeared to be cooling off. The sell-off came despite the company's inclusion in the prestigious Nasdaq-100 index, effective December 23rd.

The decline in Palantir's stock price occurred amidst a broader pullback in the technology sector, with investors seemingly reassessing the lofty valuations of AI-related companies. While Palantir's AI-driven software solutions have gained significant traction, concerns over potential revenue and profitability challenges weighed on investor sentiment.

Monday's plunge came on the heels of a remarkable rally that saw Palantir's shares soar over 340% in 2024, driven by the AI boom and growing demand for its cutting-edge data analytics and integration platforms. However, the company's inclusion in the Nasdaq-100 index failed to provide a sustained boost, as investors took stock of the stock's meteoric rise.

Despite the sell-off, Palantir remains one of the most prominent players in the AI space, leveraging advanced algorithms and machine learning capabilities to provide predictive analytics and insights to businesses across various industries. The company's ability to capitalize on the growing demand for AI solutions will be a key factor in determining its future performance.

Red Cat Holdings shares rose 14.7% after announcing a strategic partnership with Palantir Technologies.

Shares were trading around $9.49. Year to date, the stock is up about 1,000%.

The Puerto Rico-based drone technology company said the partnership would integrate Palantir's visual navigation software into select Red Cat drones, among other efforts.