Palantir (NASDAQ: PLTR) shares slid on Monday after short seller Citron Research escalated its criticism of the company, warning that even at significantly lower levels, the stock remains overvalued.
As of press time, PLTR was trading at $173.10, down 2.3% for the day. Still, year to date, the stock is up 130%.
The Citron Research bearish call follows comments from OpenAI CEO Sam Altman, who described the AI market as a bubble. Those remarks have rattled confidence across the sector and raised fresh questions about whether valuations are sustainable.
Citron, run by Andrew Left, argued that Palantir’s valuation far exceeds its fundamentals. The firm noted that if Palantir were priced on the same revenue multiple as OpenAI, the shares would still trade around $40, a level Citron insisted does not represent a bargain.
That assessment contrasts with its earlier suggestion that the stock might be attractive at that price.
Impact of PLTR insider selling
Adding to its skepticism, Citron highlighted a wave of insider selling, with CEO Alex Karp cashing out nearly $2 billion worth of stock over two years. The short seller described Karp as among the most aggressive insiders in the tech sector.
The bearish view comes as Wall Street delivered mixed signals on the stock. Wedbush analyst Dan Ives lifted his price target on Palantir from $160 to a Street-high $200, citing “eye-popping” second-quarter results and accelerating adoption of its AI suite.
Palantir reported earnings per share up 78% in the quarter, crossing $1 billion in revenue for the first time. Operating income reached $464.4 million with margins of 46.3%, while free cash flow of $568.8 million easily topped Wall Street estimates of $329.6 million.
Other analysts also issued upward revisions. D.A. Davidson’s Gil Luria raised his target from $115 to $170, calling Palantir the “best story in all of software.” Mizuho’s Gregg Moskowitz boosted his target from $135 to $165 while maintaining a “Hold” rating. Deutsche Bank and Morgan Stanley likewise revised their forecasts.
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