Palantir has worst month in two years as AI stocks selloff

Core Insights - Palantir Technologies experienced a significant decline in stock value, dropping 16% in November 2023, marking its worst month since August 2023, primarily due to investor concerns over AI stock valuations [1][2][5] - Despite strong third-quarter earnings and revenue, with a second consecutive quarter of $1 billion revenue, valuation fears led to a selloff post-earnings [2][3] - Notable investor Michael Burry has taken a short position against Palantir, contributing to negative sentiment around the stock [3][4] Financial Performance - Palantir reported third-quarter earnings that exceeded Wall Street expectations, achieving $1 billion in revenue for the second straight quarter [2] - The company's stock is currently trading at 233 times forward earnings, significantly higher than competitors like Nvidia and Alphabet, which trade at approximately 38 times and 30 times, respectively [6] Market Sentiment - Analysts from Jefferies and RBC Capital Markets expressed concerns over Palantir's "extreme" valuation and "increasingly concentrated growth profile," suggesting better risk-reward opportunities in other AI stocks like Microsoft and Snowflake [3] - The broader AI sector faced a selloff in November, with Nvidia down over 12% and Microsoft and Amazon each dropping about 5% [5] Strategic Developments - Despite the stock decline, Palantir secured new contracts, including a multi-year agreement with PwC to enhance AI adoption in the U.K. and a deal with FTAI for aircraft engine maintenance [4] - CEO Alex Karp defended the company's valuation and criticized Burry's actions as "market manipulation," asserting that Palantir is providing investment opportunities previously limited to top venture capitalists [4][7]