Over the last 30 days, stock growth flatlined at 0.3%, having returned to its late July price. Nonetheless, as one of our most covered stocks over the last two years, investors are still exposed to Palantir’s 110% YTD gains.
Yet, while we likened Palantir to a provider of a new breed of governance, we also noted that governance itself is finite. That reality is bound to weigh on the company’s proper valuation, now valued at $372.6 billion with an exceedingly high price-to-earnings (P/E) ratio of 524.93. For comparison, ’s P/E ratio is 34.49, telling investors that not much growth is expected at Amazon’s present level of dominance in e-commerce, cloud computing and logistics. Compared with Amazon’s far more grounded multiple, Palantir’s valuation looks difficult to justify.
It’s little surprise, then, that California-based Citron Research, well known for its role in the GameStop short trade, was among the first to call for lower PLTR pricing in mid-August. In that light, let’s re-examine Palantir’s growth narrative.
AI as Algorithmic Governance
There are many ways in which one could justify massive investments in AI data center infrastructure. It is estimated that, between Amazon, , and , over $300 billion will be committed for 2025 alone.
One angle is to recognize the fact that AI provides a granular control over all public discourse. This became immediately apparent after President Trump took a U-turn on the TikTok ban earlier in the year. Soon after, users noticed aggressive removal of comments, as a likely prerequisite of reversing the ban.
The appointment of former Israeli Defense Forces (IDF) official Erica Mindel as TikTok’s Public Policy Manager in July added yet another layer of clarity to President Trump’s abrupt reversal. In other words, one should expect algorithmic interception in the age of AI, because all governments require legitimacy maintenance.
Across all online platforms, AI will scour content, build profiles and intervene accordingly, greatly exceeding capacity for human content moderation but still being directed by humans.
To Tokenist readers, this is not surprising, as we covered these transatlantic efforts both by Tony Blair Institute for Global Change (TBI) and Larry Ellison (). Palantir is strategically tied to these efforts, through partnership with OpenAI and Oracle Cloud Infrastructure (OCI) for mission-cricital AI applications.
All of this is to say, AI is clearly effective even with existing confabulation concerns accounted for. After all, President Trump had already made Palantir a key data consolidator across multiple federal agencies in March.
AI as Content Creation Engine
Outside AI as facilitating algorithmic, broad-spectrum governance, a case could easily be made that AI investments are needed for the new era of content creation. Although “AI slop” is to be expected as barriers to entry are broken, this doesn’t detract from the structural shift underway.
The ability to automate not just text, but video, music, and design (all compute heavy) at scale will fundamentally change the economics of media. Platforms that harness this wave effectively stand to capture outsized value, while incumbents risk being drowned in a flood of synthetic output.
Yet, it is in this context that Palantir’s valuation started to be questioned.
The Emerging AI Narrative and Insider Selling
In an interview with The Verge on August 14, OpenAI CEO Sam Altman hinted that some portions of AI may be in a bubble:
“When bubbles happen, smart people get overexcited about a kernel of truth.”
Altman further worried that it’s “not rational behavior” for some AI startups to raise billions, such as Safe Superintelligence and Thinking Machines, both of which were founded by OpenAI’s ex-employees. To put it differently, despite having valid justifications, not every AI venture will prove durable.
Consequently, as this process unfolds, it is likely that Palantir’s valuation will be deflated along the way regardless of its strong market positioning. Following up on Altman on Fox Business, this is why Andrew Left, head of Citron Research, said that PLTR stock could revert to $40 per share.
He derived that figure by comparing OpenAI’s 17x price-to-revenue multiplier with Palantir. To further boost that narrative, he mentioned insider selling.
According to NASDAQ’s insider activity data over the last 12 months, 83.48 million PLTR shares were sold vs 53.34 million bought. Palantir CEO Alex Karp gained nearly $2 billion over the last two years, having sold another $60 million batch two weeks ago.
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