AI Stock Alarm: Citron Doubles Down on Palantir (PLTR) Overvaluation Concerns

Palantir Technologies Inc. (NASDAQ:PLTR) stock remains under intense scrutiny after Citron issued a renewed warning this week regarding the AI firm’s elevated valuation. The influential research firm, which first raised concerns earlier, reiterated its view that Palantir’s shares are still overpriced, even suggesting a $40 per share valuation would be considered generous.

This latest caution comes as the broader artificial intelligence market faces questions of sustainability, amplified by recent remarks from OpenAI CEO Sam Altman, who has openly warned of a potential AI market bubble. Palantir’s stock has seen a slip following these collective concerns, marking a second instance of Citron raising valuation alarms.

Citron’s updated analysis, led by Andrew Left, now argues that Palantir remains expensive even at levels previously considered potentially cheap. The firm draws a stark comparison to OpenAI, noting that if Palantir traded at a similar price-to-revenue multiple (17x based on Bloomberg’s 2026 revenue estimates of $5.6 billion), its implied stock price would be approximately $40 per share. Citron contends that even at this price, Palantir would rank among the most expensive SaaS stocks.

Further compounding concerns, Citron highlighted significant insider selling, specifically pointing to CEO Alex Karp’s sale of nearly $2 billion in Palantir shares over the past two years, labeling him one of the tech sector’s “most aggressive insider sellers.” As a leading provider of AI systems, Palantir’s future trajectory is a key focus for investors, but Citron’s persistent warnings underscore the ongoing debate over the realistic valuation of high-flying AI stocks.

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