PalantirThe company’s stock price fell 6% on Tuesday as Wall Street analysts expressed concern about the company’s high valuation and “Big Short” investor Michael Burry disclosed his short position in the company.
In an interview with CNBC’s “Squawk Box” on Tuesday, CEO Alex Karp slammed short sellers, calling their moves “market manipulation.”
Karp called these positions “highly inducing” and said they were “selling short one of the great businesses in the world.”
“Honestly, I think what’s going on here is market manipulation,” Karp said. “We delivered the best results anyone has ever seen.”
The stock’s move overshadowed the company’s strong operating results and stronger-than-expected guidance. Sales exceeded $1 billion for the second consecutive quarter, and Palantir raised its full-year outlook.
“The after-hours stock price reaction has been more muted on the back of high expectations (recall last quarter, Palantir beat sales by 7%) and strong outperformance (+175% year-to-date),” Goldman Sachs analyst Gabriela Borges wrote in a note to clients.
The company’s results coincided with a broader market reset as Wall Street weighed concerns about a potential artificial intelligence bubble.
Analysts have long expressed concern about Palantir’s soaring valuation compared to large, profitable tech companies. To justify this multiple, many investors are hoping the company will continue to significantly raise its guidance.
The company’s current forward price/earnings ratio is 254 times. Nvidia, the world’s most valuable company, has a forward P/E of 35x.
Jefferies analyst Brent Till said the company is a “fundamental fan” of the company, but the risk-reward relationship looks more favorable for AI software names such as: microsoft And snowflake.
Mizuho analysts said risk-reward was a “major challenge” despite a strong quarter, while DA Davidson’s Gil Luria reiterated a neutral rating on valuation concerns and said the company was “raising the bar even further.”
RBC analysts said: “Overall, we believe Palantir continues to execute primarily on AIP commercialization, but growth remains modestly supported by US corporate demand and front-loaded Al transformation spending.”
Palantir’s daily stock price chart.
