Palantir saw its stock PLTR plummet yesterday, closing November deep in the red with a 17% plunge. The fall represents the stock’s worst monthly fall since August 2023, according to data from CNBC.
The crash came as investors pulled money from AI-linked stocks over rising fears around rich prices after famous shorter Michael Burry disclosed a $900 million short position on the Peter Thiel-backed company. Burry had accused hyperscalers of artificially boosting earnings tied to the AI trade.
Palantir CEO remains upbeat despite stock slump
Palantir CEO Alex Karp appeared twice in one week on CNBC and responded to Burry by straight-up accusing him of market manipulation, and calling the investor’s actions “egregious.” “The idea that chips and ontology are what you want to short is bats— crazy,” Karp said. He continued to defend the company in a letter to shareholders.
Karp noted that the company now gives everyday investors access to returns once “limited to the most successful venture capitalists in Palo Alto.” On the earnings call, he added, “Please turn on the conventional television and see how unhappy those who didn’t invest in us are. Enjoy, get some popcorn. They’re crying. We are every day making this company better, and we’re doing it for this nation, for allied countries.”
Palantir did not start November on a bad note, as it opened the month with strong earnings. Cryptopolitan reported that Palantir beat Wall Street’s third-quarter revenue and profit estimates, delivering its second straight $1 billion revenue quarter. Sadly, valuation concerns took over after the results, and the stock dropped, and traders moved to cut risk.
Soon after the earnings drop, Jefferies sent a note to clients on November 6 saying the valuation of Palantir was “extreme” and saying that traders would find better risk and reward in other AI names such as Microsoft and Snowflake. RBC Capital Markets followed with its own note the very next day, pointing to Palantir’s “increasingly concentrated growth profile.”
Deutsche Bank also jumped in to call the company’s valuation “very difficult to wrap our heads around.” Even as shares stayed weak, Palantir still announced new business in November, signing a multi-year contract with PwC aimed at speeding up AI adoption in the U.K. It also closed a deal with FTAI, a company that works in aircraft engine maintenance. The deals brought fresh activity to the business but failed to slow the selling tied to valuation fears that stayed fixed across the AI market.
