Palantir's Market Value Drops $73 Billion Amidst Short Sellers' Profits

Palantir's six-session stock market losing streak has wiped out $73 billion in market value, benefiting short sellers with $1.6 billion in profits. Despite the drop, the stock remains the biggest gainer in the S&P 500 Index this year, up 106%. Short interest as a percentage of Palantir's float has fallen to 2.5% from nearly 5% a year ago.

Palantir Technologies (NASDAQ: PLTR) has experienced a six-day losing streak, leading to a significant drop in market value. As of July 2, 2025, the company's stock has lost $73 billion, benefiting short sellers with $1.6 billion in profits. Despite this decline, Palantir remains the biggest gainer in the S&P 500 Index this year, up 106%. The short interest as a percentage of Palantir's float has fallen to 2.5% from nearly 5% a year ago [3].

The stock's recent downturn can be attributed to broader market concerns over the health of the economy and a critical report from Citron Research. Citron Research, a prominent short-selling firm, has argued that Palantir's valuation is significantly overpriced compared to OpenAI, a leader in the AI space. According to Citron, OpenAI's valuation translates to a price-to-sales (P/S) ratio of nearly 17x, while Palantir's stock carries a P/S multiple nearly seven times that of OpenAI [2].

Palantir's stock has been a standout performer in the tech sector, delivering massive revenue and earnings growth while many of its AI rivals are still operating in the red. However, its sky-high valuation of nearly 500 times earnings has made it a target for investors looking to rotate out of riskier tech stocks [1]. The company's valuation has come under scrutiny, with Citron Research and other analysts suggesting that Palantir's stock is disconnected from reality.

Despite the recent price drop, Palantir's forward price-to-earnings ratio of 193 times means shares are still considered expensive, especially when compared to megacap peers. The company's stock has been volatile, with a high degree of short interest and significant fluctuations in price. However, the company's strong financial performance and positive earnings call sentiment have been reflected in its stock score, which is currently 75 out of 100 with an Outperform rating from TipRanks AI Stock Analysis [2].

In conclusion, Palantir Technologies' stock has experienced a significant downturn, wiping out $73 billion in market value. The decline can be attributed to broader market concerns and a critical report from Citron Research, which argues that the company's valuation is significantly overpriced. Despite the recent price drop, Palantir remains the biggest gainer in the S&P 500 Index this year and has shown strong financial performance. However, investors should be cautious due to the company's high valuation and significant volatility.

References:

[1] https://finance.yahoo.com/news/why-palantir-stock-plummeting-today-164750739.html
[2] https://www.tipranks.com/news/palantir-stock-pltr-tumbles-after-short-selling-firm-citron-says-its-no-match-for-openais-valuation
[3] https://www.cnbc.com/2025/08/20/palantir-stock-selloff-ai.html