Shares of Palantir (PLTR) dropped over 9% on Tuesday due to a critical report from short-selling firm Citron Research, which cited that PLTR stock is significantly overvalued. This comes a week after the firm’s Andrew Left said that the company’s valuation ratios are “absurd.

Citron Research, the firm led by short-seller Andrew Left, unpacked its bear case for Palantir, using OpenAI to show why it may be highly overvalued.

Andrew Left argues that investors have overhyped Palantir stock, and its valuation pales in comparison to a true AI leader like OpenAI.

The sudden reversal shows how the hottest AI trade and top-performing stock of the year is colliding with a broader market rotation out of big tech.

Palantir shares tumbled Tuesday afternoon, extending recent losses as a high-profile short seller fueled worries the stock could be overvalued after a strong run earlier this year.

Investing.com -- Palantir Technologies (NYSE:NASDAQ: PLTR) stock fell 2% Monday morning after short seller Citron Research expressed caution about the company’s valuation for the second time.