Financial research firm Citron Research, led by activist short seller Andrew Left, has doubled down on its bearish stance on Palantir (PLTR).
The firm argues that OpenAI’s upcoming stock sale will reset the benchmark for AI valuations, ultimately pointing to a potential 76% decline in Palantir’s share price.
Last week, OpenAI confirmed plans to sell $6 billion worth of stock, implying a valuation of $500 billion.
Citron contends this lofty valuation is justified given OpenAI’s explosive growth, scalable subscription model, vast total addressable market, and broad economic impact.
Citron believes this valuation provides a useful lens to reassess Palantir, which it calls “Wall Street’s favorite trading stock.”
At a $500 billion valuation, OpenAI is projected to trade at a 16.9x price-to-sales (P/S) multiple based on its estimated $29.6 billion in 2026 revenue. Applying that same multiple to Palantir’s projected $5.6 billion in 2026 revenue would imply a fair value of roughly $40 per share.
That fair value price would imply a 76% correction from the stock’s current level of around $172. Yet even at $40, Palantir would still command one of the richest revenue multiples in cloud software history.
“Let’s ask the real question: Does Palantir deserve to trade at the same multiple as OpenAI? Which company is more defensible?” Citron wrote.
The report further contrasts the two companies across revenue growth, total addressable market, and competitive positioning — all of which, Citron argues, tilt decisively in OpenAI’s favor.
By comparison, Palantir lacks the scale, speed, and defensibility to sustain its current valuation.
Palantir’s remarkable run sets up extreme risk
Betting against Palantir may prove challenging given the stock’s relentless momentum over the past year.
Palantir has been one of the best-performing stock in the S&P 500 in 2025, fueled by strong demand for its AI platforms and deep ties to U.S. government contracts.
In its most recent earnings report, Palantir announced that it had reached $1 billion in quarterly revenue for the first time.
The growth momentum has driven PLTR shares to 130% gains since the start of the year and 442% over the past 12 months, lifting its market capitalization to $412 billion.
Naturally, such explosive growth has fueled concerns about extreme overvaluation. A recent Morningstar analysis found that Palantir trades at a 500% premium compared to other AI-focused peers.
“If you are a potential customer, we believe Palantir is the ideal AI software,” wrote Morningstar’s Mark Giarelli. “If you are an investor, we recommend sitting out.”
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