Palantir Plummets as Citron's Barrage Sparks Doubt $33.2B Volume Ranks Second in Daily Trading Activity

On August 20, 2025, Palantir (PLTR) recorded a trading volume of $33.2 billion, a 49.18% increase from the previous day, ranking it second in daily trading activity. The stock closed down 1.10%, extending a six-day losing streak—the longest since April 2024. This decline pushed shares into correction territory, reflecting broader market pressures and a short seller report from Citron Research, which criticized the company as "detached from fundamentals." The report cited a hypothetical valuation of $40 per share if Palantir were valued at the same price-to-revenue multiple as OpenAI’s $500 billion valuation.

The sell-off followed Palantir’s recent surge to record highs after reporting a $1 billion revenue quarter and surpassing Wall Street estimates. The company has benefited from AI-driven government contracts, including Department of Defense deals, and recently joined the S&P 500. Despite these achievements, its forward price-to-earnings ratio of 193 remains elevated compared to peers, raising questions about valuation sustainability. Analysts have mixed views, with some upgrading target prices in recent weeks, while others maintain cautious stances.

Insider activity has added to market skepticism, with key executives selling significant portions of their holdings. Eric Woersching and Shyam Sankar, for instance, reduced their stakes by 81.31% and 36.56%, respectively, over the past three months. Institutional investors, however, remain net buyers, with new positions from firms like Mechanics Financial Corp and Signature Resources Capital Management. These moves highlight ongoing debate about Palantir’s long-term growth potential amid volatile market conditions.

The strategy of buying the top 500 stocks by daily trading volume and holding them for one day from 2022 to the present has shown a cumulative return of 106.54%, with a maximum drawdown of 3.46%. This indicates a robust performance over the past year, effectively managing risk while capturing significant market movements.