Palantir Technologies stock jumped 30% on Tuesday, its best single-day performance in two years. The surge erased $3 billion in paper profits that short sellers had built up during 2026.
The rally followed the company's earnings report, which included a raised full-year forecast and results that beat Wall Street's revenue and earnings estimates.
Short Sellers Caught Off Guard
Before the earnings announcement, short sellers had accumulated $2.7 billion in paper profits for the year. Tuesday's move wiped out those gains entirely. Investor Michael Burry disclosed a bearish position against Palantir in November and later covered half of that position by June.
Analyst Upgrades and Skepticism
Deutsche Bank analyst Brad Zelnick upgraded Palantir to buy from hold, setting a $200 price target. But Jefferies maintained its underperform rating, arguing that better risk-reward exists in Microsoft and Amazon. Palantir still trades at more than 83 times forward earnings and is down 10% for the year.
CEO Points to Commercial Demand
Chief Executive Alex Karp described the company's commercial demand as 'otherworldly.' Nearly 70% of analysts covering Palantir rate the stock a buy.
The stock's valuation remains a point of debate. The next test will be whether Palantir can sustain its growth trajectory amid high expectations.
