Palantir Technologies Inc. sank ~9% even after boosting its outlook. Following a nearly 400% surge in the past year, its bullish AI prospects weren’t enough to offset valuation angst. Adding to the concerns, hedge fund manager Michael Burry disclosed bearish wagers on the firm and fellow AI giant Nvidia Corp. The stock’s order momentum drove a robust earnings report, but when you’re priced for perfection, it’s often simply not enough. The company’s US-specific growth also concerned analysts, but this is a valuation story over the coming months as cracks appear in the “AI Trade” – note we believe these aren’t structural issues, more a case of derisking as performance needs to justify valuations as market sentiment comes off the boil.
- Palantir looks vulnerable to a far deeper correction after its steep appreciation over the last year, which has driven its lofty valuation to 272x CY25.
