Why Palantir Stock Is Tumbling Tuesday

Palantir (PLTR) shares tumbled Tuesday afternoon, extending recent losses as a high-profile short seller fueled worries the stock could be overvalued after a strong run earlier this year. 

The shares were down 9% around $158 in recent trading. Still, they’ve more than doubled in value in 2025, leaving Palantir the best-performing stock in the S&P 500 for the year so far as demand for the data analytics software company’s Artificial Intelligence Platform drives record sales.

Short seller Andrew Left of Citron Research, who voiced concerns about the stock’s valuation in a Fox Business interview last Wednesday, said in a report yesterday that he believes the stock has become “detached from fundamentals” and would be worth $40.

The report compares Palantir to OpenAI, and posits that if Palantir were to trade at the same price-to-revenue multiple as the ChatGPT maker, given Bloomberg consensus projections, Palantir’s stock price would be closer to $40. However, “even that price would leave Palantir among the most expensive [software as a service] names in history,” Left said.

Left, whose sharp commentary and claimed track record of exposing fraud and overvaluation have earned him the moniker “The Bounty Hunter of Wall Street,” has become a controversial figure and faces criminal charges for securities fraud.

Still, he’s not the only one who’s raised concerns about Palantir’s lofty valuation. Of the eight Wall Street analysts with current ratings surveyed by Visible Alpha, just two have issued “buy” recommendations versus six “hold” ratings, amid some concerns the stock may have climbed too high, too fast, and could be due for a drawback.

Jefferies analysts, who applauded Palantir’s strong revenue growth and outlook after the company reported results earlier this month, said they still believe the stock’s valuation is “disconnected from even optimistic growth scenarios.” HSBC analysts, who have a neutral rating for the stock, also warned it might already be “priced for perfection” and could struggle to keep up with investors’ high expectations.