The shorts may be circling, but Jim Cramer has a message for them: don't get cocky. The CNBC host fired off a blunt warning on X, declaring, "Shorts momentarily ‘winning' with Palantir Technologies Inc (NASDAQ:PLTR). They best not overplay their hand. Karp knows all." That confidence in CEO Alex Karp comes as Palantir stock cools off—down 8% over the past five trading days—despite a monster 409% run in the past year.
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Bulls Vs. Bears
At about 17% below its 52-week high of $189.46, Palantir's recent dip has given bears some room to celebrate. But with short interest sitting at just 2.54%, it's hardly a stampede. Cramer's warning is aimed at those betting that Palantir's dizzying ascent—from a low of $29.31 over the past year—is running out of fuel.
Adding fuel to the debate, Jefferies analyst Brent Thill said Palantir's fundamentals are "on a different planet," during an interview with Bloomberg Tech. He highlighted the company's rare "Rule of 90" performance—where top- and bottom-line growth add up to 90%, a benchmark most software players never touch. That kind of efficiency has left Wall Street struggling to fit Palantir into the usual valuation box.
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The Valuation Puzzle
Even Thill admitted, "This is an area we've been wrong." While Palantir has defied the odds, he warned that the story could change if revenue growth begins to decelerate. Cautionary tales like Snowflake Inc (NYSE:SNOW) loom large—high-flyers that once commanded rich multiples before reality set in.
Still, Karp isn't playing the traditional growth playbook. He's floated the bold idea of growing revenue tenfold while shrinking headcount—a claim Thill called "mind-blowing." For a company whose software has historically required plenty of manpower to implement, it's an audacious bet on scalability.
For now, Cramer's message is clear: don't underestimate Karp. Palantir's fundamentals may be out of this world, but so are the expectations.
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