Are you also wondering what's happening with Palantir stock?
Palantir stock dropped almost 10% yesterday, and in after-hours trading, it continues to fall another 2%...
But...
Why is Palantir stock so sensitive?
Here comes the valuation: Citron Research announced entering a short position in Palantir with a price target of $40 per share.
Yes, you heard right!
The stock price at the time of Citron's update was about $170 per share...
And what is Citron's claim?
It doesn't claim fraud or manipulation in the earnings, but only fair valuation...
So before we analyze Citron's report, we've compiled for you the most expensive stocks on Wall Street, and see who's at the top:
(Data is accurate as of the beginning of the week)
The most expensive stocks by price-to-sales multiple: who's at the top?
We're used to hearing about the price to earnings ratio, but when talking about Price-to-Sales (P/S), that's a completely different story...
An indicator that shows how much investors are willing to pay for every dollar of sales, and it reveals exactly where the market is excited, and perhaps also where there's a bubble (?)
Here's the updated ranking:
$RDDT – 22.3x just recently IPO'd and is already priced as if the whole world will manage online communities only through it (?)
$AVGO – 22.9x the communications and AI chip giant, not cheap at all. Those who believe in the chip bottleneck are willing to pay (?)
$AXON – 22.9x a leader in security technologies and smart policing. A high multiple indicating belief in enormous future growth (?)
$HOOD – 25.2x the retail broker that revolutionized trading. Revenue still needs to catch up to the hype (?)
$APP – 26.8x the digital advertising company that became an empire. Sharp growth, but how far can it continue (?)
$ARM – 31.0x the chip architecture company, the basis for almost every mobile phone in the world. Those who believe in AI pay a premium (?)
$NET – 33.1x Cloudflare, a cybersecurity and smart internet company. Investors are pricing it as if it will control cloud infrastructure (?)
$FIG – 37.0x a hot company still at the beginning of its journey. The multiple reflects huge expectations (?)
$ALAB – 39.9x Astera Labs, a technology company developing connectivity solutions for servers, cloud, and artificial intelligence. A critical player in the AI ecosystem. (?)
$PLTR – 100.9x Palantir, the legend (?). Insane price-to-sales multiple. The most expensive company in the market, indicating uncompromising belief in its artificial intelligence capabilities and global data control (?)
A high price-to-sales multiple doesn't necessarily mean the stock is 'too expensive.' Sometimes it's simply an expression of confidence in insane future growth.
On the other hand, is it also a warning sign?
Let's challenge some thought processes:
What if...
Expectations are not met... (?)
These are the stocks the market is pricing on a dream. Some may fulfill it, while others might find that reality is a bit tougher?