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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 remains super expensive despite a more-than-20% decline in recent sessions. But Citi analyst Tyler Radke believes PLTR shares have a very durable moat.

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

While the operational momentum is clearly solid, investors should pay closer attention to the risks. History shows Palantir stock can fall hard as sentiment shifts.

However, since hitting a record closing high of $186.97 on August 12, the stock on Tuesday was on track for a five-day losing streak and its worst day since May 6. As of 1500 ET, PLTR's class A shares were -9.48% at $157.53.

Palantir Technologies Inc. (NASDAQ:PLTR) is one of the stocks to watch as Jim Cramer looked at market rationality. Cramer called it “a talented company” and said: “These skeptics want to understand crypto,