Palantir Faces Investor Exodus as Insiders Sell and Short Sellers Circle

While Palantir’s operational metrics show robust health with soaring revenues and an intact artificial intelligence narrative, its stock is experiencing significant downward pressure. This divergence emerges even as sector giant Nvidia reports staggering earnings, further fueling the AI investment theme. The stark contrast at Palantir is driven by two powerful signals: a coordinated sell-off by top executives and a major bearish bet from a famed investor.

Executive Team Liquidates $205 Million in Holdings

A wave of insider selling occurred between November 20 and 21, 2025, creating substantial headwinds for the stock. Leading the disposals, Chief Executive Officer Alex Karp divested 585,000 shares, a transaction valued at approximately $96 million. He was joined by other senior leaders, including Stephen Cohen and Shyam Sankar. In aggregate, these transactions removed over $205 million worth of stock from the hands of company insiders.

Such a synchronized departure of insider capital sends an unambiguous message to the market. The individuals with the most intimate knowledge of the company’s prospects appear to believe the current valuation has peaked. For shareholders, this activity transcends a simple cautionary note, representing a definitive red flag.

Famed Investor Michael Burry Establishes Short Position

Compounding the negative sentiment, Michael Burry—the legendary investor renowned for predicting the 2008 financial crisis—has taken a substantial short position against Palantir. He acquired put options with a notional value of $912 million. Although his actual capital outlay is estimated to be around $9.2 million, the symbolic weight of his move is considerable. Burry is effectively betting on a decline in Palantir’s share price, and his market assessments command respect.

Valuation Concerns Mount Despite Business Growth

From a fundamental perspective, concerns are mounting even as the underlying business expands. On November 21, 2025, the investment research firm Morningstar increased its fair value estimate for Palantir to $135 from a previous $115. While this suggests improved fundamentals, the stock’s trading level of about $155 per share indicates it is still priced roughly 15 percent above this calculated intrinsic value.

Should investors sell immediately? Or is it worth buying Palantir?

Morningstar awards the company just two out of five stars, classifying it as “moderately overvalued.” Analyst Mark Giarelli acknowledged the uniqueness of Palantir’s “ontological platform” but highlighted that a valuation exceeding 120 times revenue multiples leaves absolutely no room for operational missteps.

A Tale of Two AI Strategies: Nvidia’s Strength vs. Palantir’s Struggle

The disparity within the AI sector is becoming increasingly pronounced. On November 19, 2025, chipmaker Nvidia announced record quarterly revenue of $57.0 billion, a 62 percent year-over-year surge. CEO Jensen Huang described a “positive AI feedback loop,” demonstrating that capital continues to flow vigorously to infrastructure providers.

However, the market is now drawing a distinction. While hardware suppliers like Nvidia directly capitalize on infrastructure spending, software-centric firms like Palantir are facing heightened scrutiny. The central question for investors is whether Palantir can grow into its extravagant valuation or if it will succumb to inflated expectations.

Strong Operational Performance Overshadowed by Price

It is crucial to recognize that Palantir’s business operations are undeniably strong. The third-quarter 2025 results highlight this success:

• Total revenue reached $1.18 billion, a 63 percent increase.
• U.S. commercial customer revenue surged 121 percent, propelled by its AIP platform.
• The “Rule of 40” metric hit a record 114 percent.

The weakness lies not in the business model but in the stock’s price. The convergence of massive insider selling, a high-profile short bet, and a valuation that stretches beyond optimistic analyst projections has created a powerful technical ceiling. The market is beginning to separate the clear AI winners from the companies whose potential appears to be already fully priced in.