Citron Research Short Selling Palantir
Wall Street’s renowned short-selling firm Citron Research has publicly announced its short position on Palantir. Citron’s founder, Andrew Left, stated that Palantir’s stock price should reasonably fall within the range of $40 to $50, indicating a potential downside of over 70% from its current market price.
(Background: “Bond King” Bill Gross: Avoid meme stocks! But GameStop now resembles Bitcoin)
(Context: Major short-seller Citron’s short position on MicroStrategy causes a 20% drop: MSTR has completely diverged from Bitcoin’s fundamentals)
AI Surge Elevates Palantir
The artificial intelligence (AI) whirlwind has propelled many companies to unprecedented heights by 2025, with data analytics company Palantir standing out as a prime example. According to Google Finance data, Palantir’s stock has soared by 139% year-to-date, and has increased by 480% over the past year, reaching a market capitalization of $429.2 billion.
Citron’s Warning: Palantir’s Valuation and Growth Discrepancy
Despite Palantir’s popularity in the market, Citron Research has recently indicated its short position on Palantir. Andrew Left emphasized that Palantir’s stock price should reasonably be in the $40 to $50 range, revealing a significant downside potential from the current market price.
Left further explained that Palantir’s forward price-to-earnings ratio has exceeded 200 times, with a price-to-sales ratio of about 120 times, and its enterprise value to free cash flow has skyrocketed to 700 times. In light of these exorbitant multiples, he warned:
“You cannot call yourself a data giant while asking investors to ignore valuation metrics and multiples.”
Thus, Citron’s core reasoning for shorting is that even if Palantir maintains a 50% revenue growth rate and delivers a 50% operating profit margin for five consecutive years, its valuation still strays from fundamentals.
Three Drivers of AI Star Aura
However, following the announcement of Citron’s short position, Palantir’s stock price has not experienced significant impact. Experts analyze that investors are willing to chase Palantir for three main reasons:
First, the combination of military and government contracts with AI represents two of the hottest themes in the current market. Palantir has long served U.S. government and allied security agencies while pushing its Foundry, Gotham, and AIP platforms into the commercial sector, embodying both “hard national defense” and “soft innovation” narratives.
Second, its financial results are indeed impressive. In the second quarter of 2025, Palantir achieved $1.004 billion in revenue, a year-on-year growth of 48%, breaking the $1 billion quarterly revenue mark. The performance in the U.S. market was particularly outstanding, with commercial revenue growing by 93% to $306 million; government revenue grew by 53% to $426 million.
Third, the AI boom combined with national security moat has endowed Palantir with a strong “meme stock” attribute, attracting retail investors on platforms like Reddit to continue to fuel its rise.
However, Andrew Left also cautioned that Palantir is not without competitors, such as the upcoming IPO of Databricks, which specializes in data analytics and has more customers than Palantir. This is also one of the reasons for Citron’s short position on Palantir.
Palantir Technologies is an American data analytics and software company founded in 2003, focusing on big data processing, artificial intelligence, and data integration solutions. Its main platforms, Gotham and Foundry, assist government agencies and large enterprises in analyzing complex datasets, applied in defense, counter-terrorism, and business optimization fields.
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