$3 billion. That's what short sellers gave back in a single trading session when Palantir stock rocketed 30% on Tuesday. The surge marked the company's best single day in two years, according to S3 Partners. Shorts had accumulated a $2.7 billion paper gain before Monday's earnings upended everything.
The catalyst was Palantir's raised full-year forecast, which beat both revenue and income expectations. Investors who had been betting against the stock watched those profits evaporate as the market repriced the company. Meanwhile, Michael Burry's earlier short position, which he'd partially covered by June, no longer matters much. The stock is still down 10% for the year, on track for its worst performance since 2022.
Not everyone's convinced the rally sticks. Valuation concerns linger, with the stock trading at more than 83 times forward earnings. Jefferies maintained an underperform rating, preferring other AI-linked names like Microsoft and Amazon. But Deutsche Bank's Brad Zelnick flipped to buy with a $200 price target, citing back-to-back beat-and-raise quarters. CEO Alex Karp addressed one nagging worry on the call, telling investors that commercial demand for Palantir's analytics tools is "otherworldly." That statement matters because it pushes back against fears that rival AI developers might chip away at the software business.
Nearly 70% of analysts covering Palantir now rate it a buy. Whether the stock can hold these gains depends on whether that commercial momentum is real or just noise.
This article is informational only and does not constitute investment advice or a recommendation to buy or sell any security.
