After a nearly straight-up move for the stock market over the past month, it's reasonable to expect at least a day here and there when stocks take a breather and cool off. That was the tone of the market early Wednesday, as market participants seemed to focus on worries about how much longer the COVID-19 pandemic will rage on, as well as new political wrangling in Washington. As of 10:45 a.m. EST today, the Dow Jones Industrial Average (DJINDICES:^DJI) was down 52 points to 29,772. The S&P 500 (SNPINDEX:^GSPC) had lost 3 points to 3,660, and the Nasdaq Composite (NASDAQINDEX:^IXIC) had fallen 34 points to 12,321.

A big part of the stock market's success has come from companies in high-flying areas of the market that have become household names among those familiar with those industries. Yet even when stocks have been well hyped, they're still vulnerable to downturns. That's what we're seeing from cloud specialist Palantir Technologies (NYSE:PLTR) and electric truck pioneer Workhorse Group (NASDAQ:WKHS) Wednesday morning, and shareholders are trying to figure out what it means not just for those two stocks but for their entire corners of the market.

Palantir darkens

Shares of Palantir Technologies fell more than 10% on Wednesday morning. The recent IPO saw a big spike in interest during October and November, but not everyone on Wall Street is completely convinced that the data analytics software company is everything it's cracked up to be.

Analysts at Morgan Stanley (NYSE:MS) cut their rating on Palantir from equal weight to underweight, setting a price target of $17 per share. Their argument was pretty simple: The stock is trading at more than 30 times what Morgan Stanley estimates Palantir's 2022 sales will be, and that's more than twice the average even in the high-valuation software-as-a-service stock (SaaS) arena.

The analysts were also critical of what has pushed the stock higher. Despite IPO hype, Morgan Stanley doesn't see anything having really changed as far as Palantir's fundamental business is concerned. That doesn't mean that Palantir won't be successful, but the risk-reward proposition is now much more out of balance as a result of the run-up in the share price.

Investors have had to get used to expensive valuations in order to invest in the SaaS stock universe. Today's move from Palantir is a good reminder that eventually, fundamentals have to justify big stock gains.

White van with Workhorse logo on front, parked on the side of a narrow street.

Image source: Workhorse Group.

Workhorse deals with post office delays

Elsewhere, Workhorse Group's stock suffered an even bigger hit, falling 21%. The electric-truck maker has been hoping for some good news on a prospective contract bid for a long time, but so far, it hasn't gotten a definitive answer.

The U.S. Postal Service (USPS) has been looking for electric-powered mail trucks to handle its delivery needs. Workhorse has vehicles that would fit the bill, specifically an all-electronic version of trucks similar to what post office workers have driven for decades.

But the Postal Service decided to once more delay its decision on which company will win the lucrative contract. After having initially set expectations for the end of this year, mail officials now believe that Workhorse and its rivals won't have a final decision until the second quarter of the government's 2021 fiscal year -- meaning sometime in the first three months of the new year.

Workhorse still has plenty of potential. But investors want to see the company's electric trucks in use, and the USPS was the best prospect for that to happen quickly. Now, shareholders will have to be patient once again -- just as many investors in popular stocks have to do in order to realize the full potential of their investments.