Citron Research says Palantir stock at $40 per share would still be an expensive AI stock to own. Wall Street recommends caution on PLTR shares as well.

Short-seller Citron targets PLTR again, using a Databricks comparison to argue the stock is overvalued after its report sent shares falling.

AI software firm Palantir Technologies ($PLTR) has seen its stock drop for six straight sessions, wiping out $73 billion in market value.

The Citron Research bearish call follows comments from OpenAI CEO Sam Altman, who described the AI market as a bubble.

As Palantir drops 15%, tech bull Dan Ives calls the selloff a healthy buying opportunity and sees massive long-term upside for the AI leader.

Palantir stock continues to sink as investors pull back more broadly from AI stocks due to valuation concerns. Here’s why PLTR shares are not worth buying on the dip.

Since Cramer’s post, Palantir has fallen −16%, recording five consecutive red daily candles, marking its steepest five-day decline since April 2025. On Tuesday alone, PLTR stock plunged −9.35% (−$16.28), closing at $158.34, and was seen trading pre-market at $156.80 (−0.60%) on Wednesday, August 20.

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Palantir shares tumbled Tuesday afternoon, extending recent losses as a high-profile short seller fueled worries the stock could be overvalued after a strong run earlier this year.

Palantir stock slightly gapped down on Wednesday, easily skating beneath the 50-day Simple Moving Average (SMA). This tells us that the bottom is unlikely to be near. The July 1 pullback near $130 is a possible level to watch as it sits close to the 100-day SMA.

Palantir is facing renewed bearish pressure after Citron Research issued a warning, projecting that the stock could fall more than 70% .