Palantir Stock Faces Pressure as AI Sector Sees Valuation Concerns

Palantir Technologies Inc. (PLTR) shares plunged 16% in November, marking their steepest monthly decline since August 2023. The selloff reflects growing investor skepticism toward high-flying AI stocks, with Palantir trading at 233 times forward earnings despite the drop.

Short-seller Michael Burry, famed for predicting the 2008 financial crisis, added fuel to the fire by disclosing bearish positions against Palantir and chipmaker Nvidia. CEO Alex Karp made rare back-to-back CNBC appearances to defend the company's trajectory, dismissing Burry's MOVE as "market manipulation."

While Palantir secured notable partnerships with PwC and FTAI Aviation during the quarter, analysts at Jefferies and Deutsche Bank cautioned about "extreme" valuations across the AI sector. The stock's November slump occurred despite Palantir beating Q3 revenue and earnings estimates, with quarterly sales topping $1 billion for the second consecutive period.