---
title: "Why Palantir Stock Plummeted This Week"
description: "Palantir's stock (PLTR) dropped 9.5% this week, contrasting with the S&P 500's 0.4% gain. The decline followed a short report from Citron Research, which compared Palantir's high price-to-sales (P/S) "
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/254222021.md"
published_at: "2025-08-22T18:19:49.000Z"
---

# Why Palantir Stock Plummeted This Week

> Palantir's stock (PLTR) dropped 9.5% this week, contrasting with the S&P 500's 0.4% gain. The decline followed a short report from Citron Research, which compared Palantir's high price-to-sales (P/S) ratio of 115 to OpenAI's 17 after its recent funding. Citron argues that Palantir's valuation is irrational given OpenAI's rapid growth, suggesting that if Palantir traded at OpenAI's multiple, its share price would be $40. The report advises avoiding Palantir due to its excessive valuation.

Shares of **Palantir** (PLTR 2.05%) fell this week. The stock is down from last week's close by 9.5% as of 1:59 p.m. ET on Friday. The drop comes as the **S&P 500** gained 0.4% and the **Nasdaq-100** lost 0.7%.

A favorite of retail traders, Palantir's stock was sliding this week after a short report from a notable short seller compared the company's valuation to the implied valuation of OpenAI after its latest funding round.

## Palantir's sales multiple dwarfs OpenAI's

Citron Research, the short seller behind the **GameStop** imbroglio, released a note immediately following news that OpenAI was raising another $6 billion at a $500 billion valuation. Citron pointed out that this means OpenAI's implied price-to-sales (P/S) ratio is 17 and that this would make it by far one of the most expensive software-as-a-service (SaaS) stocks ever. In fact, a P/S of 17 gives OpenAI the "highest multiple of any scaled SaaS stock in the world."

Though Palantir's stock price has fallen this week since the short report, it still carries a P/S of 115 -- *nearly 7 times that of OpenAI.* OpenAI is one of the most influential companies in decades and is growing at a lightning pace -- a pace that far outstrips Palantir's -- yet Palantir's stock is significantly higher.

Image source: Getty Images.

If Palantir stock traded with the same multiple, 17 times sales, it would be priced at $40 a share -- and it would still be one of the most expensive SaaS stocks on the market. Citron says this is not rational, and I agree.

Palantir is undoubtedly a strong company, but its stock is just too expensive. I would avoid it.

### Related Stocks

- [OpenAI.NA - OpenAI](https://longbridge.com/en/quote/OpenAI.NA.md)
- [PLTR.US - Palantir Tech](https://longbridge.com/en/quote/PLTR.US.md)

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> **Disclaimer**: This article is for reference only and does not constitute any investment advice.