How AI darling Palantir became the S&P 500’s best and worst stock of 2025, climbing 144% before shedding value in 6 straight sessions

However, Palantir’s meteoric rise has been ed by a brutal reversal

This tumble handed short sellers $1.6 billion in fits, Bloomberg reported, citing data from S3 Partners. (That figure is still dwarfed by the $4.5 billion paper losses that shorts racked up earlier in the year, S3 says.) In recent days, Palantir has also been the worst performer in the S&P 500, illustrating an extreme swing from hero to villain in the market

The vicious short-seller report Palantir’s dramatic stock moves ed fresh fire from short sellers, particularly Citron Re, led by Andrew Left

In a scathing report, Citron argued that Palantir’s stock was detached from its fundamentals and sound analysis

It included a caricature of Palantir CEO Alex Karp in the royal court of OpenAI, titled “Your highness’s multiple,” laying out the case for Palantir having much farther to fall

Palantir’s dependence on government deals introduces uncertainty and volatility, leading Citron to claim that the stock is unjustifiably expensive even after recent losses. “OpenAI is creating a flywheel that Palantir lacks,” the report says, adding that the widening moat and cycle of growth, data, and scale is “reminiscent of Google in its prime.” Palantir, on the other hand, is more a defense contractor, with real “stickiness,” but growth hinging on slow, customized contracts that don’t compound. “OpenAI is a self-reinforcing growth engine, while Palantir is essentially locked-in consulting wrapped in software.” Citron contrasted a chart of Palantir’s impressive, steady revenue growth with OpenAI’s skyrocketing results

Fueled by speculative optimism AI, its price rapidly baked in years of expected growth

But as fit-taking sets in, momentum evaporates, and critical reports highlight the mismatch between price and fundamental value, fortunes can reverse just as quickly

Even now, contrarian trading remains high—if Palantir rebounds, short interest is expected to return as investors closely watch future earnings, contract renewals, and the sustainability of its growth strategy

Palantir’s swings also come against the backdrop of a wider “ sell-off” in ing reports that the AI revolution isn’t materializing as planned

OpenAI CEO Sam Altman himself rattled by using the B-word: bubble

Citron remarked with interest: “This morning, we read that Sam Altman stated the AI market is in a bubble

Altman isn’t shorting Palantir—he’s simply telling the truth

The market is frothy, and no one knows it better than the man who built the most valuable AI company in the world.” Palantir did not immediately respond to a request for

For this story, Fortune used generative AI to help with an initial draft

An editor verified the accuracy of the information before publishing

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