Shares in Palantir Technologies Inc. (NASDAQ:PLTR) declined 6.56% in pre-market trading on Tuesday. The software giant posted upbeat third-quarter results on Monday, but saw bearish bets from large investors.
Michael Burry Turns Bearish
Billionaire Michael Burry has warned that the ongoing AI surge could echo the dot-com bubble of 2000. His firm, Scion Asset Management, disclosed more than $1 billion in bearish put options against AI-focused stocks, including Nvidia Corp. (NASDAQ:NVDA) and Palantir, with five million put options placed on the latter.
Even Ark Invest, led by renowned investor Cathie Wood, decided to reduce its holdings in Palantir despite the company’s impressive third-quarter earnings report. The firm sold 38,338 shares of Palantir stock through its ARK Innovation ETF (BATS:ARKK).
Several market analysts have issued warnings about potential overvaluation in certain sectors, particularly in the AI space. Mohamed El-Erian, the chief economic adviser at Allianz, warned that investments in some AI-related names could “end up in tears”.
Results Beat, Upbeat Forecast
Palantir’s Q3 revenue was $1.18 billion, exceeding the estimated $1.09 billion. The adjusted earnings per share (EPS) for the quarter were 21 cents, surpassing the anticipated 17 cents.
The total revenue for the quarter increased by 63% year-over-year, with U.S. revenue growing by 77% to $883 million. The U.S. Commercial revenue saw a 121% year-over-year increase to $397 million, and the U.S. Government revenue jumped by 52% year-over-year to $486 million.
The company, which builds analytics tools for large companies and government agencies, said it expects revenue of about $1.33 billion for the current three-month period, exceeding the $1.09 billion expected by analysts, according to Benzinga Pro.
Palantir Technologies holds a momentum rating of 97.91% and a value rating of 0.55%, according to Benzinga's Proprietary Edge Rankings. The value metric evaluates a stock’s relative worth by comparing its market price to fundamental measures of the company’s assets, earnings, sales, and operating performance. Check the detailed report here.
Price Action: On a year-to-date basis, Palantir stock surged 175.54%, as per data from Benzinga Pro. At the time of writing, the stock is trading at $191.82.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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