Palantir Technologies Inc (NYSE:PLTR) shares are trading lower Wednesday, adding to losses of nearly 8% over the last week. Here's a look at what's going on.

What To Know: The recent pullback in Palantir shares appears to be due to profit taking. Despite the recent slide, Palantir shares are still up approximately 185% year-to-date.

Investors may be turning more cautious as other AI names navigate earnings season. AI chipmaker Nvidia reported earnings near the end of November and the stock has trended lower since.

Another AI name, C3.ai, is set to report earnings after the close on Wednesday. With the stock up nearly 170% since the start of the year, expectations will be high and any significant move in shares is likely to impact other AI-related names.

As previously reported by Benzinga, William Blair analysts recently raised concerns over an upcoming contract deadline with the U.S. Army. Recent commentary suggests there may be potential disagreements over data ownership and the contract is set to expire in the coming weeks.

From a technical perspective, the recent pullback in shares was needed as Palantir's relative strength index (RSI) had reached overbought territory when the stock hit new 52-week highs in late November.

According to a recent technical analysis from Benzinga, Palantir faces resistance at $19.95 and $21.09 and has support at $17.84 and $16.29. It's possible that the stock could trade lower in the near term to fill a gap that exists between $14.96 and $17.21.

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PLTR Price Action: Palantir shares were down 2.95% at $17.76 at the time of publication, according to Benzinga Pro.

Photo: Cory Doctorow from Flickr.