Shares of Palantir (PLTR) dropped over 9% on Tuesday due to a critical report from short-selling firm Citron Research, which cited that PLTR stock is significantly overvalued. This comes a week after the firm’s Andrew Left said that the company’s valuation ratios are “absurd.

Andrew Left argues that investors have overhyped Palantir stock, and its valuation pales in comparison to a true AI leader like OpenAI.

The sudden reversal shows how the hottest AI trade and top-performing stock of the year is colliding with a broader market rotation out of big tech.

Palantir's price-to-sales ratio of 114 is way above OpenAI's 17. Palantir's success in defense work could block access to growth as enterprise AI payoff remains elusive

Software stocks have been under pressure—and there may be more selling to come as highflying shares of Palantir finally succumb to gravity.