Palantir Technologies (PLTR +1.65%) stock saw a big pullback this week on the heels of the company's third-quarter report. The company's Q3 results actually came in significantly above Wall Street's forecasts, but that hasn't been enough to stop its stock from seeing a substantial valuation pullback. As of 12:30 p.m. ET Friday, the artificial intelligence (AI) software leader's stock had fallen roughly 14% from its price at last week's market close.
Palantir's stock is pulling back in this week's trading amid a rise in market skepticism about valuations in the AI space and macroeconomic concerns. News that "Big Short" investor Michael Burry's hedge fund has taken out put options on Palantir has also factored into the pullback.
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Strong Q3 results haven't stopped Palantir's stock slide
Palantir published its Q3 results after the market closed on Monday and reported sales and earnings for the period that outperformed Wall Street's targets. While the average analyst estimate had called for non-GAAP (adjusted) earnings per share of $0.17 on sales of $1.09 billion, the company reported earnings per share of $0.21 on revenue of $1.18 billion in the period. Sales growth for the company's U.S. government customers segment increased 52% year over year to $486 million, and overall revenue was up 63%.
NASDAQ: PLTR
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Despite the strong Q3 performance, Palantir's stock price fell after earnings in response to high-profile investment banks and analysts raising concerns that valuations for AI stocks were in a bubble. Adding another bearish catalyst, Burry's Scion Asset Management reported put options with a notional value of $912 million -- reflecting a bet that Palantir's share price will decline.
Sell-offs for Palantir and other AI stocks continued in Thursday's and Friday's trading after Challenger, Gray & Christmas reported that U.S. businesses had laid off more than 150,000 employees last month -- marking the highest level in 22 years. With investors trying to determine how to properly value AI stocks, Palantir could continue to see big volatility in the near term.
