Palantir (NASDAQ: PLTR) shares tanked nearly 8% on Tuesday, November 4, just one day after hitting a record price of $207.18 following a strong third-quarter earnings call.
The drop was initiated when a number of analysts started pointing at valuation concerns and cautioning that the premium was difficult to justify even with accelerating fundamentals.
A day earlier, ‘Big Short’ investor Michael Burry disclosed a new portfolio update revealing a $912 million bearish bet on the software leader and criticized those still optimistic about the artificial intelligence (AI) sector.
While investors such as Wedbush’s Dan Ives dismissed Burry’s moves as “dead wrong,” Palantir actually lost $42 billion in market cap within a day of the investor’s disclosure, falling from ~$489 billion on November 3 to ~ $447 billion on November 4.
At the time of writing, the stock is down another 2.37% in pre-market trading, sitting at $185.90.
Palantir CEO still optimistic
Palantir CEO Alex Karp was also not amused by Burry’s take and did not hold back on short sellers in general:
“I do think this behavior is egregious, and I’m going to be dancing around when it’s proven wrong,” said Karp in an interview with CNBC.
The CEO also suggested more than doubt may be at play, even hinting at potential market manipulation.
During his appearance on Squawk Box, Karp also emphasized the company’s past quarter results, calling Palantir “one of the great businesses of the world.”
Wall Street upgrades Palantir
DA Davidson likewise appears bullish, increasing its PLTR stock price target to $215 from $170 on November 5 while reiterating a “Neutral” rating and citing “parabolic U.S. demand for AI solutions” as a growth catalyst.
Since the earnings call, Cantor Fitzgerald has set its target to $198 on November 4, remaining “Neutral,” while Goldman Sachs lifted its own to $188, noting revenue beat by 8% and strong guidance.
Similarly, Baird boosted its target to $200 on the same day, citing Palantir’s ninth straight quarter of accelerating growth.
Featured image via Shutterstock