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Palantir Shares Decline Despite Strong Earnings; CEO Criticizes Short Sellers

2025-11-04

The BareStory

Shares in software company Palantir fell on Tuesday despite the firm reporting third-quarter results that surpassed analyst estimates and raising its full-year guidance. The company’s stock price dropped by between 6% and 9%. Shares for chipmaker Nvidia also declined by more than 2% on the same day. One summary noted that Palantir's revenue surpassed $1 billion for the second consecutive quarter.

In remarks on Tuesday, Palantir CEO Alex Karp criticized short sellers, alleging their actions constituted "market manipulation," according to the summaries. Karp specifically targeted a bet against his company and Nvidia, with one summary stating he called the move "bats--- crazy" and a short against the artificial intelligence sector. He also publicly questioned whether the investor was still holding the short position.

The CEO's comments followed a regulatory filing that showed investor Michael Burry's hedge fund, Scion Asset Management, held bets against both Palantir and Nvidia. The filing, which reflected positions as of September 30, showed put options with a notional value of approximately $912 million against Palantir and $187 million against Nvidia. It was unclear if these positions were still active, and Burry reportedly declined to comment.

The stock declines occurred amid concerns from analysts and investors regarding high valuations in the AI sector. Prior to Tuesday's trading, Palantir's stock had increased by more than 170% for the year. Analysts cited the company's valuation as a primary concern, with one firm reportedly calling the risk-reward profile a "big challenge." According to one summary, analysts also suggested that Palantir's growth seems narrowly supported by U.S. enterprise demand.

Left Perspective

  • The company is demonstrating strong financial performance.
  • The CEO alleges market manipulation by short sellers.
  • Leadership is publicly challenging specific bearish investors.

Right Perspective

  • Palantir's stock valuation is a primary source of concern.
  • The risk-reward profile for the stock appears challenging.
  • The company's growth may be narrowly supported.

How it may affect me

As a U.S. reader:

• Your 401(k) or other investment accounts may be affected, as the stock price of major tech companies like Palantir and Nvidia has declined.

• The debate over high valuations in the AI sector could signal increased market volatility, particularly for those with investments in technology-focused funds.

• Analyst concerns that a major company’s growth is narrowly supported may indicate potential weakness in a key sector of the U.S. stock market.

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