Topline<\/p>\n
Software analytics firm Palantir is plummeting on the stock market Tuesday, with shares falling 9% as other AI darlings like NVIDIA and Meta cool down from gains made earlier this month.<\/p>\n
Palantir shares fell as low as 9% Tuesday. (Photo illustration by Cheng Xin\/Getty Images)<\/p>\n
Getty ImagesKey Facts<\/p>\n
Palantir shares were down 9% on Tuesday afternoon at $157.91, erasing strong gains made by the company after it topped Wall Street estimates and hiked its full-year guidance in its latest earnings report this month. <\/p>\n
Tuesday\u2019s slump marked the company\u2019s fifth consecutive day of losses as it trades down 15.5% since Aug. 13.<\/p>\n
Multiple<\/a> outlets<\/a> have linked Palantir\u2019s tumble to a short report from Citron Research that says the company\u2019s stock is overvalued, citing OpenAI\u2019s $500 billion valuation and noting if OpenAI\u2019s price-to-sales was applied to Palantir, the company\u2019s stock would trade at $40\u2014a massive drop from its $159.15 per share.<\/p>\n NVIDIA shares slipped as low as 3% hours before close, also erasing gains that began near the start of the month.<\/p>\n Meta\u2019s stock fell nearly 2% to $753.43 per share Tuesday afternoon, adding on to its 3% drop in share price on Monday.<\/p>\n The Nasdaq fell 1.4% in midday trading.<\/p>\n Get Forbes Breaking News Text Alerts<\/strong>: We\u2019re launching text message alerts so you’ll always know the biggest stories shaping the day\u2019s headlines. Text \u201cAlerts\u201d to (201) 335-0739 or sign up here<\/a>.<\/p>\n Crypto Stocks Are Also Feeling The Crunch<\/p>\n Cryptocurrency stocks also tumbled Tuesday, with Coinbase shares falling nearly 5%, Robinhood falling more than 5% and Bitcoin sliding 2.4% amid a two-day crypto pullback<\/a>. <\/p>\n Big Number<\/p>\n $1 billion. That is how much Palantir reported in quarterly revenue this month, marking the first time the firm has surpassed the milestone earnings number.<\/p>\n Tangent<\/p>\n OpenAI CEO Sam Altman commented on the state of the AI bubble to The Verge<\/a> last week, telling the outlet, \u201cAre we in a phase where investors as a whole are overexcited about AI? My opinion is yes,\u201d adding, \u201cIs AI the most important thing to happen in a very long time? My opinion is also yes.\u201d<\/p>\n Key Background<\/p>\n Zooming out, Palantir\u2019s recent stock struggles are part of a wildly successful year for the company\u2019s shares, which are up 110% since the start of the year, when they were priced at $75.19. Investors have been wowed by the company\u2019s AI tools, which likely played a large role in Palantir securing a $10 billion deal with the Army that consolidates 75 contracts into one arrangement, according to Axios<\/a>. Palantir expects more growth this year, boosting its guidance and anticipating revenues between $4.14 billion and $4.15 billion for the full year, up from its previous expectations of $3.89 billion to $3.90 billion. Palantir\u2019s success comes as the Trump administration has pushed for greater AI and chip infrastructure in the U.S., roping in financial commitments companies like Apple<\/a>, NVIDIA, OpenAI and even considering a 10% stake in Intel, shares of which rocketed 7%<\/a> Tuesday.<\/p>\n Further Reading<\/p>\n