Palantir is experiencing its worst stretch since spring 2024, with six consecutive days of selling pressure wiping out nearly a fifth of its value from recent highs. The AI darling that just posted its first billion-dollar revenue quarter is now facing a harsh reality check from short sellers and broader market turbulence.
Palantir just hit turbulence at the worst possible time. The AI software company that was riding high on its first billion-dollar revenue quarter is now deep in correction territory after six straight days of relentless selling. Wednesday's session pushed the stock down 18% from its recent intraday peak, marking the longest losing streak since April 2024 and erasing the company's spot among America's 20 most valuable firms.
The selloff gained momentum after short seller Andrew Left's Citron Research released a scathing report calling the company "detached from fundamentals and analysis." Left argues shares should trade at $40 if valued using the same price-to-revenue multiple as OpenAI's recent $500 billion valuation. "Karp and his team should be proud. But for investors, that's where discipline kicks in," Left wrote in the report. "Comparison is the enemy of happiness, and when measured against true AI leaders, Palantir's price already reflects success beyond its fundamentals."
The timing couldn't be more jarring for investors who watched Palantir rocket to record highs earlier this month after the company delivered its first $1 billion-revenue quarter and crushed Wall Street estimates. The earnings beat seemed to validate the company's transformation from a niche government contractor to an AI powerhouse capturing both commercial and defense spending.
Palantir's journey to this moment has been nothing short of meteoric. The company rode the artificial intelligence wave straight into the top 10 U.S. tech firms this year, after joining the S&P 500 in 2024. Government contracts, particularly with the Department of Defense, have provided a steady foundation while commercial AI applications drove explosive growth.
