How AI darling Palantir became the S&P 500’s best and worst stock of 2025, climbing 144% before shedding value in 6 straight sessions

The vicious short-seller report

Best of times, worst of times

Nick Lichtenberg is Fortune Intelligence editor and was formerly Fortune's executive editor of global news.

Palantir Technologies has created one of the most dramatic stories on Wall Street this year, defying conventional investment narratives. In 2025, it became the top-performing stock in the S&P 500, surging over 106% and at points climbing 144% from the start of the year—outpacing even AI heavyweights like Nvidia. This explosive growth was fueled

However, Palantir’s meteoric rise has been followed

Palantir’s dramatic stock moves followed fresh fire from short sellers, particularly Citron Research, led

Citron’s thesis is that OpenAI, widely recognized as the leader in AI, is about to receive a $500 billion valuation with projected revenue of $29.6 billion in 2026, resulting in a price-to-sales ratio of nearly 17.

Short sellers like Left insist that Palantir’s business isn’t as scalable or as subscription-based as Wall Street prefers, in stark contrast to OpenAI. Palantir’s dependence on government deals introduces uncertainty and volatility, leading Citron to claim that the stock is unjustifiably expensive even after recent losses.

“OpenAI is creating a flywheel that Palantir lacks,” the report says, adding that the widening moat and cycle of growth, data, and scale is “reminiscent of Google in its prime.” Palantir, on the other hand, is more like a defense contractor, with real “stickiness,” but growth hinging on slow, customized contracts that don’t compound. “OpenAI is a self-reinforcing growth engine, while Palantir is essentially locked-in consulting wrapped in software.” Citron contrasted a chart of Palantir’s impressive, steady revenue growth with OpenAI’s skyrocketing results.

Palantir’s story in 2025 is a case study in market euphoria versus valuation reality. Fueled

Even now, contrarian trading remains high—if Palantir rebounds, short interest is expected to return as investors closely watch future earnings, contract renewals, and the sustainability of its growth strategy. This extraordinary volatility means that Palantir, in 2025, is the top-performing and worst-performing stock—at the same time.

Palantir’s swings also come against the backdrop of a wider “tech sell-off” in markets following reports that the AI revolution isn’t materializing as planned. A sweeping MIT report found that despite tens of billions of investment, 95% of generative AI pilots at companies are failing.

OpenAI CEO Sam Altman himself rattled markets

Palantir did not immediately respond to a request for comment.

For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.