Palantir CEO Blames 'Market Manipulation' While Stock Bleeds 25%—But The Numbers Tell a Different Story

Here’s what went down:

Palantir (PLTR) shares crashed 25% from their November peak after legendary short-seller Michael Burry—the guy who called the 2008 housing collapse—dropped a huge short bet against the stock. CEO Alex Karp hit CNBC claiming short sellers are “manipulating the market,” calling Burry’s move “bat s*** crazy.”

The problem? Karp’s got a point on the product, but completely misses the valuation elephant in the room.

Palantir legitimately makes killer software. Its Gotham platform helped US intelligence in counterterrorism, Foundry dominates enterprise analytics, and the new AI platform (AIP) is genuinely useful for building production-grade generative AI apps. Sales have accelerated 9 straight quarters. Forrester calls them a tech leader. All facts.

But here’s where it gets messy: The stock trades at 102x sales after dropping 25%. That’s still the most expensive valuation in the entire S&P 500—by a massive margin. AppLovin, the next closest? 32x sales. Translation: Palantir could crater another 66% and still be the priciest stock in the index.

Karp conflates two totally different questions:

1. Does Palantir build great software? (Yes)
2. Is the stock overvalued? (Absolutely)

No company—no matter how good—justifies that P/S multiple indefinitely. Even at its previous peak in April 2023, when it launched AIP, few software stocks have ever sustained 100x+ valuations.

The bottom line: Great company, terrible price. Even shareholders should sit this one out or keep positions tiny. Being right about AI doesn’t mean being right about valuation.