Palantir drops 6% after Michael Burry reveals short position and valuation concerns

Palantir’s stock plunged 6% on Tuesday, and it came even after the company posted strong earnings, raised its full-year guidance, and crossed $1 billion in revenue for the second quarter in a ￰0￱ Wall Street didn’t care very much, and not for very long ￰1￱ actually set the fire was ￰2￱ Burry (yes, the same guy from “The Big Short”) who just revealed he’s betting against ￰3￱ sent shockwaves through the AI crowd and added fuel to fears that this stock might be flying too close to the ￰4￱ Alex Karp didn’t sit ￰5￱ went on CNBC and absolutely lost it, saying short sellers are engaged in “market manipulation.” He said the trades were “super triggering” and accused them of “shorting one of the great businesses of the world.” He told CNBC, “We delivered the best results everyone, anyone’s ever seen.” But the market clearly ￰6￱ right after his comments, shares continued to slide ￰7￱ Street questions Palantir’s sky-high valuation The stock fall overshadowed Palantir’s ￰8￱ beat both revenue and earnings expectations, lifted guidance, and still got punished.

Why? Expectations were already ￰9￱ Sachs’ Gabriela Borges reminded clients that the company had already crushed revenue last quarter by 7%, and the stock had soared 175% ￰10￱ basically, beating the numbers wasn’t enough ￰11￱ wanted fireworks, and they got… an angry CEO and a short position from ￰12￱ main issue is the ￰13￱ trades at a forward price-to-earnings (P/E) ratio of ￰14￱ compare, Nvidia, which is the most valuable chipmaker on Earth, trades at just ￰15￱ Oracle has a forward P/E of 35, and AMD sits at ￰16￱ yeah, Wall Street thinks Palantir’s premium is ￰17￱ unless the company keeps raising the bar, that multiple starts looking more and more ￰18￱ Thill at Jefferies said they still like Palantir but think better AI software bets exist, pointing to Microsoft and Snowflake as stronger ￰19￱ said the risk-reward was becoming a “big challenge.” Over at D.

A. Davidson, Gil Luria kept a neutral rating, saying Palantir is “raising the bar even higher.” Analysts at RBC didn’t sound impressed either, warning that while Palantir’s AIP platform is still being rolled out, growth is mostly limited to ￰20￱ customers and early AI spending ￰21￱ selloff hits Palantir and other AI names Palantir wasn’t the only one ￰22￱ broader market also slumped ￰23￱ S&P 500 fell 0.9%, the Nasdaq lost 1.5%, and the Dow dropped 193 ￰24￱ stocks led the ￰25￱ slid 2%, AMD dropped over 1%, and even giants like Amazon and Nvidia pulled ￰26￱ AI trade that’s been lifting the whole market just hit a ￰27￱ S&P’s forward P/E ratio is now over 23, close to levels last seen in 2000, right before the dot-com ￰28￱ Saglimbene from Ameriprise told CNBC, “We haven’t really seen any major corrections or any real pressure on stocks since April.” He said the market needs a ￰29￱ all the capital expenditures being pumped into AI, he questioned if the earnings growth can really keep ￰30￱ Wall Street execs added to the ￰31￱ Sachs CEO David Solomon warned that a 10% to 20% drop in stocks is likely over the next 12 to 24 ￰32￱ Stanley’s CEO Ted Pick said 10% to 15% drawdowns should be expected and aren’t even caused by big macro problems, they just ￰33￱ before Tuesday, markets were ￰34￱ Monday, the S&P 500 and Nasdaq rose, but the Dow dropped over 200 ￰35￱ though the S&P is still close to record highs, it even closed above 6,800 last month, traders are clearly nervous ￰36￱ up to $30,050 in trading rewards when you join Bybit today