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Palantir's Meteoric Ascent and Sudden Downfall Stuns Wall Street
22 Aug
Summary
- Palantir became top-performing S&P 500 stock in 2025, surging over 106%
- Shares plunged over 17% in past 6 trading sessions, wiping out $73 billion
- Short-sellers profited $1.6 billion from Palantir's dramatic stock moves
In 2025, Palantir Technologies has created one of the most dramatic stories on Wall Street, defying conventional investment narratives. The company became the top-performing stock in the S&P 500, surging over 106% and at points climbing 144% from the start of the year—outpacing even AI heavyweights like Nvidia. This explosive growth was fueled by Palantir's robust financial performance, including its first billion-dollar quarter, driven by momentum from government and commercial AI contracts.
However, Palantir's meteoric rise has been followed by a brutal reversal. Over the past six trading sessions, Palantir shares plunged more than 17%, wiping out $73 billion in market capitalization and marking the largest drop since April. This tumble handed short-sellers $1.6 billion in profits, illustrating an extreme swing from hero to villain in the market.
The vicious short-seller report from Citron Research, led by Andrew Left, argued that Palantir's stock is detached from its business fundamentals. Citron claimed that OpenAI, the leader in AI, is about to receive a $500 billion valuation, while Palantir is forecasted to deliver only $5.6 billion in revenue in 2026. Applying OpenAI's valuation multiple to Palantir would yield a stock price of just $40, suggesting that the stock is unjustifiably expensive even after recent losses.
