AI software firm Palantir Technologies (PLTR) has seen its stock drop for six straight sessions to wipe out $73 billion in market value. The stock is now down over 17% from its record high on August 12, making this its worst week since the tariff-driven selloff earlier this year. Unsurprisingly, this sharp decline has been a rare win for short sellers, who have made $1.6 billion in gains, according to data from S3 Partners. Interestingly, though, that’s still small compared to the $4.5 billion they have already lost betting against Palantir in 2025.
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Indeed, even with the recent dip, Palantir remains the top-performing stock in the S&P 500 (SPY) this year, up 106%. As a result, this huge rally made Palantir one of the most expensive stocks on the market, which led many short sellers to back off in recent months. In fact, some were forced out as the stock kept rising, with Steve Sosnick, Chief Strategist at Interactive Brokers (IBKR), comparing it to being hit by a freight train. However, the recent selloff is part of a wider tech pullback, as investors shift from high-growth names like Palantir to cheaper sectors.
While long-term investors, not short squeezes, have mainly driven Palantir’s rise, signs are emerging that short sellers may be slowly returning. Since early June, short interest has grown by about 10 million shares. And although Palantir could recover from this slump, analysts believe that its downward trend might attract more bearish traders. As one portfolio manager put it, if the stock bounces even a little, expect short sellers to jump back in.
Is PLTR Stock a Buy?
Turning to Wall Street, analysts have a Hold consensus rating on PLTR stock based on four Buys, 13 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average PLTR price target of $154.57 per share implies that shares are trading near fair value.
