In perhaps his boldest move yet, Citron Research's Andrew Left has now bet against Palantir in what many pundits would describe as a "widow-maker" trade ripe for a momentum-driven massacre. Fortune favors the bold, it is said though, and Left just might find Lady Luck on his side in this Titanic-meets-iceberg showdown.
To wit, while speaking on Fox Business, Citron Research's Andrew Left declared that he was now short on Palantir, and that he added to his bearish bet on the stock in the aftermath of Palantir's latest quarterly earnings release, going so far as to label his negative thesis on the stock as "obvious."
As a refresher, Palantir currently has two specialized platforms, with Gotham geared towards the data analytics needs of various government agencies, and Foundry enabling the agglomeration and analysis of data for enterprises. Palantir has also developed its bespoke Artificial Intelligence Platform (AIP), which allows for the integration of various LLMs and other types of generative AI within an organization's operational structure via AI-powered applications and agents.
Do note that Palantir delivered an across-the-board pristine quarterly earnings report earlier in August, prompting Morgan Stanley to declare:
"Wow… is our reaction to Q2 results with nearly every headline metric and KPI accelerating versus Q1 which itself was a very strong quarter."
Palantir blew away expectations on nearly every metric. It notched its first-ever billion dollar quarter, reporting $1.004 billion in revenue against a consensus estimate of $939.71 million, driven by 157 deal closures of at least $1 million, 66 deal closures of at least $5 million, and 42 deal closures of at least $10 million, which pushed up its closed total contract value (TCV) metric to a record-setting $2.27 billion, corresponding to a year-over-year growth of 140 percent.
The star of the proverbial show was Palantir's commercial business, however, which is now expected to haul in over $1.302 billion in FY 2025, as per the company's guidance, representing a year-over-year growth rate of at least 85 percent. Even so, Alex Karp - who is Palantir's CEO - wants this run-rate to grow by 10x over the next five years, which would imply a CAGR of 58 percent, as per the calculations by UBS.
Palantir's guidance was equally impressive, now projecting between $1.083 billion and $1.087 billion in revenue for its third quarter, and raising its full-year revenue guidance to $4.142 - $4.152 billion, with a free cash flow projection of between $1.8 billion and $2.0 billion.
What's more, Palantir's CEO identified three major tailwinds for his company during the earnings call: custom AI application demand, data infrastructure investment, and defense tech modernization.
Of course, for the past few years, Palantir's Achilles heel has been its nose-bleed valuation. And, it is here that Andrew Left senses an opportunity.
After all, with a trailing price-to-earnings (P/E) ratio of 614.57 and a forward P/E ratio of 294.12, Palantir is in a class of its own when it comes to valuation metrics. For comparison, SAP has a trailing P/E ratio of around 45.20.
And, Andrew Left is no milksop short-seller. While Citron Research ended its GameStop short campaign in January 2021 after losses incurred during the stock’s retail-driven surge, the firm has achieved notable short-selling successes, such as with Nikola Corporation, where Citron labeled the company an “intricate fraud,” precipitating a significant share price drop and the resignation of its founder, Trevor Milton. Similarly, Citron Research's short report on Jumia Technologies also contributed to substantial declines in the stock price in 2020, though the firm later reversed its bearish stance as the company pivoted operations.
It is said that the market can remain irrational longer than most investors can remain solvent. Everyone agrees Palantir is overvalued. The question is: can Andrew Left maintain his short position on the stock in the face of repeated momentum pumps? Will he be forced to cover his short position GameStop-style or stand vindicated, as was the case with Nikola?
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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