Palantir just closed its toughest month since 2023, with a 16% decline in November as investors pulled back from high-valuation AI names.
Despite beating Wall Street expectations and securing a second consecutive quarter of $1 billion in revenue, the company was hit with a broad selloff tied to fears that AI stocks have become overheated.
Analysts from Jefferies, RBC, and Deutsche Bank all flagged Palantir’s valuation as stretched, despite the firm’s continued strong enterprise momentum.
The month grew more chaotic when famed investor Michael Burry doubled down on his bet against Palantir, sparking a public back-and-forth with CEO Alex Karp.
Karp appeared twice on CNBC to defend the company, accusing Burry of market manipulation and calling the short thesis irrational.
Even with new deal wins, including partnerships with PwC and FTAI, Palantir couldn’t escape the broader market pullback, as major AI-linked stocks like Nvidia, Microsoft, and Amazon also saw notable declines.
Palantir still trades at an eye-popping 233x forward earnings, far higher than Nvidia and Alphabet.
While supporters argue the company is redefining enterprise AI adoption, concerns about valuation continue to overshadow the firm’s long-term narrative heading into December.
Key Takeaways:
- Palantir posted its second $1B revenue quarter but was hit by valuation concerns.
- CEO Alex Karp publicly pushed back against Michael Burry’s short position.
- AI stocks across the board faced heavy selling throughout November.
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