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Palantir Under Pressure: Correction and Tension Between Valuations and Market Expectations

December 1, 2025
The technology sector experienced a noticeable cooldown in November, with Palantir becoming one of the most visible victims of the correction. The company, presenting itself in recent quarters as one of the new leaders in AI infrastructure, saw its stock fall by 16%, marking its worst monthly performance since August 2023. However, this decline was not caused by a deterioration in fundamentals – quite the opposite, Palantir once again exceeded Wall Street’s expectations. So, what triggered the downturn? Palantir Under Pressure: Correction and Tension Between Valuations and Market Expectations
Prices Slow Down

To begin with, it is essential to highlight the general fact that corrections are a natural part of price development in financial markets, and every investor should be fully aware of their potential occurrence. Currently, as suggested in the introduction, the downward movements do not represent any significant drop in the intrinsic value of companies; it is rather a technical correction. Evidence lies in Palantir’s latest quarterly results – the company recorded its second consecutive quarter with revenues exceeding 1 billion dollars.

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Palantir stock price performance over the last five years*

On the other hand, the situation is also influenced by the traditional profit-taking of investors after a strong year. For comparison, Nvidia saw a decline of 12%, Microsoft by 5%.* The only bright exceptions that remained in positive territory within the Magnificent Seven group in November were Apple and Alphabet.

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Nvidia stock price performance over the last five years*

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Microsoft stock price performance over the last five years*

Michael Burry vs. Palantir

The drop in the stock price further intensified the conflict between Palantir and well-known investor Michael Burry. Burry, best known for predicting the 2008 financial crisis, is currently openly betting against both Palantir and Nvidia. He argues that tech giants are artificially inflating profits and that the entire AI sector has unrealistic growth expectations.

Alex Karp, Palantir’s CEO, responded unusually sharply. Within a single week, he appeared on CNBC twice and accused Burry of market manipulation, calling his behavior unfair.

New Contracts and the Future of Palantir

In recent weeks, Palantir has also announced several important partnerships – a multi-year contract with PwC aimed at supporting AI adoption in the United Kingdom, and an agreement with FTAI focused on optimizing aircraft engine maintenance. These deals confirm that Palantir is strengthening its position as a player capable of combining its software, AI solutions, and partnerships with major clients, which is essential given Palantir’s current position.

The key risk for investors remains the company’s high valuation in terms of the price-to-future-earnings ratio, which stands at 233 times. On one hand, this may evoke a premium price, but it is also important to note that the company only recently entered its profitable phase in 2023, making the high level understandable. Therefore, moving forward, attention should be focused primarily on the pace of securing new contracts.

Disclaimer! This marketing material is not and must not be understood as investment advice. Data related to the past are not a guarantee of future returns. Investing in a foreign currency may affect returns due to fluctuations. All securities transactions can lead to both profits and losses. Forward-looking statements represent assumptions and current expectations that may not be accurate or are based on the current economic environment, which may change. These statements do not guarantee future performance. InvestingFox is a trademark of CAPITAL MARKETS, o.c.p., a.s., regulated by the National Bank of Slovakia.

*Data related to the past are not a guarantee of future returns.

Sources:

https://www.cnbc.com/2025/11/28/palantir-ai-selloff-worst-month.html

https://www.cnbc.com/2025/11/03/palantir-pltr-q3-earnings-2025.html

https://www.cnbc.com/2025/11/11/big-short-investor-michael-burry-accuses-ai-hyperscalers-of-artificially-boosting-earnings.html

https://investors.palantir.com/news-details/2025/Palantir-and-PwC-UK-Sign-a-Multi-Year-Multi-Million-Pound-Deal-to-Accelerate-AI-Transformation-as-Preferred-Partners-in-the-UK/

InvestingFox is a trademark of CAPITAL MARKETS, o.c.p., a.s., with its registered office at Slávičie údolie 106, Bratislava – Staré Mesto district, 811 02. The company is registered in the Commercial Register of the Municipal Court Bratislava III, Section: Sa, File No.: 4295/B, ID No.: 36 853 054, VAT No.: 2022505419.

CAPITAL MARKETS, o.c.p., a.s. is a securities dealer pursuant to Section 55(1) of Act No. 566/2001 Coll. on Securities and Investment Services and on Amendments to Certain Acts, as amended (hereinafter the “Securities Act”). On October 30, 2007, CAPITAL MARKETS, o.c.p., a.s. was granted, by Decision No. OPK-2297/2007 of the National Bank of Slovakia -PLP, a license to provide investment services pursuant to Section 54(2) in conjunction with Sections 59(2) and (3) of the Securities Act, which was extended in accordance with the provisions of the Securities Act by Decision No. OPK-1830/2008-PLP dated April 21, 2008, Decision No. OPK-11601-1/2008 dated January 28, 2009, Decision No. ODT-5059-3/2012 dated July 23, 2012, and Decision No. ODT-9332/2014-1 dated October 21, 2014.

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