Palantir’s dramatic stock moves followed fresh fire from short-sellers, particularly Citron Research, led by Andrew Left. In a scathing report, Citron argued that Palantir’s stock was detached from its business fundamentals and sound analysis.

In recent days, Palantir's stock has been showing signs of slowing down. After hitting a new all-time high of $190 on Aug. 12, it has proceeded to trade lower. By Monday, the AI stock would close at just over $174 -- down 8% from its recent high.

That rise has made Palantir extremely pricy. Shares now trade at a multiple of 214 times expected earnings over the next 12 months, compared to an S&P 500 average of 22 times earn

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.

Two hedge fund managers with a track record for market beating returns sold Nvidia and bought Palantir in the second quarter.

AI software firm Palantir saw strong quarterly revenue, but its price-to-earnings ratio could be a warning sign for investors.

Shares in Palantir fell as much as 9% in late trading on Tuesday amid a broad AI pullback and a critical short-seller report.

Palantir ( PLTR -5.81%) stock is getting hit with another substantial round of sell-offs Wednesday on the heels of a big valuation pullback in yesterday's trading. The artificial intelligence ( AI) leader's share price was down 7% as of 11:15 a.m. ET and had been down as much as 9.8% earlier in trading.