Palantir’s stock has taken a hit this week, plummeting more than 11% despite a better-than-expected earnings report. CEO Alex Karp, never one to shy away from controversy, has squarely aimed his sights on investors betting against the software company. This raises the question: is Karp’s defense justified, or is it a deflection from underlying valuation concerns?
Karp, who co-founded Palantir in 2003, doubled down on his criticism of short sellers in two separate CNBC interviews this week. Following “Big Short” investor Michael Burry’s disclosed short positions against Palantir and Nvidia, Karp accused short sellers of “market manipulation” on Tuesday.
He reiterated this point in a Friday interview with CNBC’s Sara Eisen, specifically addressing Burry’s wager against Palantir.”To get out of his position, he had to screw the whole economy by besmirching the best financials ever … that are helping the average person as investors [and] on the battlefield,” Karp stated.
While Palantir’s stock has dipped this week, it’s essential to view this in the context of its overall performance. The stock is still up a staggering 135% in 2025 and has multiplied 25-fold in the past three years, propelling the company’s market capitalization to over $420 billion. However, this meteoric rise raises concerns about valuation. While revenue and profit are indeed growing rapidly, the stock’s multiples have surged at an even faster pace. The stock currently trades at approximately 220 times forward earnings, a ratio on par with high-growth but often volatile stocks like Tesla. This premium valuation demands sustained, exceptional performance to justify investor confidence.
Comparatively, industry peers like Nvidia and Meta boast forward price-to-earnings ratios of around 33 and 22, respectively. This divergence highlights the market’s high expectations for Palantir’s future growth trajectory. Investors are betting heavily on Palantir’s ability to leverage its data analytics platform in both the commercial and government sectors, particularly in the rapidly evolving landscape of artificial intelligence.
Adding fuel to the debate, in August, Citron Research’s Andrew Left, a well-known short seller, labeled Palantir as “detached from fundamentals and analysis” and suggested a fair share price of $40. Despite this bearish call, the stock closed on Friday at $177.93, showcasing the resilience of the bullish sentiment surrounding the company, at least for now.
Palantir, known for its analytics tools catering to both large corporations and government agencies, released earnings and revenue figures on Monday that exceeded analysts’ estimates. The company also issued a forward-looking forecast that surpassed Wall Street’s projections.
Despite the positive earnings report, the stock experienced an approximate 8% decline after the announcement and subsequently slid nearly 7% on Thursday. Karp asserted to Eisen that the recent surge in Palantir’s stock price benefits not only Wall Street but also retail investors.
“We’re delivering venture results for retail investors,” he claimed.
Historically, Palantir has faced substantial short interest. However, currently, the number of investors actively betting against the company remains relatively low. The short interest ratio, representing the percentage of outstanding shares being sold short, peaked at over 9% in September but has since fallen to just over 2%, marking one of its lowest levels since the company’s public listing in 2020. The decrease in short interest suggests a waning conviction among bears, possibly driven by the company’s strong growth and potential in the AI space.
Regardless, Karp’s strong rebukes to his doubters are not new. He previously suggested on CNBC that individuals who “don’t like the price” should simply “exit.”
In May, following an earnings-related stock downturn, Karp stated, “You don’t have to buy our shares.”
“We’re happy,” he declared. “We’re going to partner with the world’s best people and we’re going to dominate. You can be along for the ride or you don’t have to be.”
Palantir’s engagements with government entities, including U.S. Immigration and Customs Enforcement, have sparked criticism. Furthermore, Karp has acknowledged that his outspoken pro-Israel stance has led some employees to depart from the company.
The outspoken CEO has been particularly vocal this week. During Monday’s earnings call, he questioned the happiness of those who did not invest in Palantir, suggesting that they “get some popcorn.”
He concentrated his criticism on Burry following the investor’s disclosure of short positions in Palantir and Nvidia.
“The two companies he’s shorting are the ones making all the money, which is super weird,” Karp remarked on CNBC’s “Squawk Box” on Tuesday. “The idea that chips and ontology is what you want to short is bats— crazy.”
Original article, Author: Tobias. If you wish to reprint this article, please indicate the source:https://aicnbc.com/12519.html
