Palantir Shares Fall 17% in Worst Six-Day Slide Since 2024 Amid Tech Sector Worry

Palantir Technologies has endured a six-day losing streak, wiping out $73 billion in market value and delivering long-awaited gains to short sellers who had struggled for months against the stock’s meteoric rise [1]. The decline, which began after the stock hit a record high on August 12, represents the company’s worst performance since April 2024 and has driven shares down more than 17%, marking one of the most severe weekly drops since the tariff-driven sell-off earlier this year [1]. Despite this painful correction, Palantir remains the top-performing stock in the S&P 500 for 2025, with a total gain of 106% year to date [1].

Short sellers, who had been heavily positioned against the company, have pocketed $1.6 billion in profits from the recent selloff, according to data from S3 Partners LLC [1]. However, this does not erase the $4.5 billion in losses short sellers have incurred this year betting against Palantir. The recent drop provided a rare reprieve for contrarians, who had faced relentless pressure as the stock surged to lofty valuations [1].

Analysts suggest the selloff was not driven by short sellers taking control but rather by broader market weakness, particularly in the tech sector. The stock’s sharp decline coincided with falling shares in tech giants like Google, Meta, and Microsoft, which were also under pressure amid shifting investor sentiment [1]. Vikram Rai, a portfolio manager at Fny Capital Management LP, noted that Palantir’s overvaluation and the broader underperformance of high-beta tech stocks played a major role in the pullback [1]. Steve Sosnick of Interactive Brokers LLC added that many short sellers had already exited their positions as the stock continued to rise, with short interest as a percentage of the float now at 2.5%, down from nearly 5% a year ago [1].

The selloff has also been part of a larger rotation out of tech stocks and into more defensive sectors such as energy, healthcare, and consumer staples, as investors prepare for potential signals from the Federal Reserve’s upcoming Jackson Hole symposium [1]. Market-wide anxiety has been further fueled by concerns over AI valuations, with OpenAI CEO Sam Altman warning that the sector is in a speculative bubble [1]. A study from the Massachusetts Institute of Technology highlighted that many tech firms have yet to convert their AI investments into meaningful profits, raising doubts about the sector’s long-term fundamentals [1].

Adding to the uncertainty, reports suggest that the Trump administration is considering taking equity stakes in chipmakers like Intel, a move that has unsettled investors in the technology space [1]. Shares of major chipmakers, including Nvidia and Advanced Micro Devices, have also dropped, with traders closely watching Nvidia’s upcoming earnings report on August 27 for further clarity on demand for AI-related products [1].

While the recent downturn has brought some relief to short sellers, it has also highlighted the fragility of high-flying tech stocks following years of rapid growth. As the broader market reevaluates risk and returns, Palantir’s correction serves as a stark reminder of the volatility that can accompany speculative momentum in the technology sector [1].

Source:

[1] Palantir's six-session slump erases $73 billion in value, as short sellers finally win (https://www.cryptopolitan.com/zh-cn/marathon-digital-announces-750-million/)

[2] Fed's Bowman Suggests Allowing Central Bank Staff to (https://www.fastbull.com/news-detail/feds-bowman-suggests-allowing-central-bank-staff-to-4340359_0)

[3] ARTIFICIAL INTELLIGENCE NEW ERA (https://wallstreetmediaco.net/artificial-intelligence-new-era/)