Global equity markets are on the back foot this morning, with investors suddenly feeling queasy about one of the market’s most hyped names.
By 10:00 GMT, US futures were sharply lower, the Nasdaq down 1.5%, the S&P 500 off 1.2%, and the Dow Jones slipping 0.9%, as traders digested a bruising pre-market slide in Palantir.
Shares in the data analytics group fell even after the company reported another set of blowout results. Revenue for the third quarter jumped 63% to $1.18bn (£901m), while net income surged to $476m, or 18 cents a share, up from $143.5m a year ago. Impressive numbers by any measure, but not impressive enough for a stock trading at roughly 255 times forward earnings.
Dan Coatsworth, head of markets at AJ Bell, summed up the mood neatly. “It speaks to just how supercharged Palantir’s share price has been in 2025 that even a set of numbers as impressive as those it produced for its third quarter were insufficient to sustain the momentum,” he said.
The problem isn’t performance, it’s expectations. Palantir has become one of the poster children of the AI boom, its valuation inflated by a mix of hype, government contracts, and speculation about its political connections. Coatsworth noted that while the company continues to deliver hefty revenue growth and has even upgraded its annual guidance, its close links to intelligence agencies mean investors are often operating with limited visibility into its operations.
Adding fuel to the nerves, famed contrarian Michael Burry, immortalised in The Big Short, has reportedly taken a sizeable short position against Palantir, betting that its lofty valuation can’t hold. His move has become a talking point on trading desks, injecting a dose of anxiety into an already jittery tech market.
Whether Burry’s bet proves prescient or premature remains to be seen. For now, Palantir’s stumble is serving as a reality check for a market that’s grown comfortable with sky-high multiples and unstoppable AI narratives.