Palantir just got dragged through six painful days on Wall Street, losing $73 billion in market value and giving short sellers a rare payday after months of losses. This losing streak, which started after the stock hit a record high on August 12, marks the company’s worst run since April 2024. Shares are now down over 17%, putting them on track for the ugliest week since the tariff-driven drop earlier this year. Despite being the biggest loser in the S&P 500 over the last six sessions, Palantir is still the top performer on the index in 2025, holding a 106% gain since the start of the year. That explosive rally led to a sky-high valuation, which most short sellers couldn’t handle. But this latest slide finally gave them room to breathe, and collect. Shorts pocket gains after long beating The decline handed $1.6 billion in profits to traders who bet against the Denver-based company, data from S3 Partners LLC showed. But those profits don’t undo the $4.5 billion in total losses short sellers have suffered this year betting against Palantir. The overall trend had been brutal for contrarians—until now. Matthew Unterman, managing director at S3, said short interest as a percentage of Palantir’s float dropped to 2.5%, down from nearly 5% a year ago. That means many traders had already exited their short positions as the stock kept rising. Steve Sosnick, chief strategist at Interactive Brokers LLC, said those traders either “wanted to avoid being run over by a monster momentum trade or were forced out after the freight train hit.” Vikram Rai, a portfolio manager and macro trader at Fny Capital Management LP, made it clear that the current drop wasn’t caused by bears taking control. “The selloff that we’re seeing in Palantir, it’s long overdue and it’s not because the short sellers have taken over,” Vikram said . He pointed to broader market weakness, especially in tech names like Google, Meta, and Microsoft, which are also under pressure. “When you have the likes of Google, Meta and Microsoft declining, then obviously the high-beta stocks, which are hopelessly overvalued, will decline more.” Most of Palantir’s rise in 2025 came from long-only investors rather than a short squeeze. But with the stock finally showing some weakness, some contrarians are stepping back in. Short interest has grown by around 10 million shares since June, according to S3. That’s still a small chunk of Palantir’s 2.3 billion shares outstanding, but it’s a sign of growing pressure. Tech under pressure as investors rotate out The hit to Palantir isn’t happening in a vacuum. On Wednesday, the Nasdaq Composite dropped 144.76 points, or 0.68%, ending at 21,170.19. The S&P 500 slipped 16.40 points, or 0.26%, closing at 6,394.97. Only the Dow Jones held flat, edging up by 1.48 points to 44,923.75. Investors are rotating away from tech into cheaper sectors like energy, healthcare, and consumer staples. The pullback comes ahead of the Federal Reserve’s Jackson Hole symposium, where traders expect to hear new signals about policy direction. At the same time, worries are building across the tech space. OpenAI CEO Sam Altman recently warned that AI stocks are “in a bubble,” triggering more selloffs. A study by the Massachusetts Institute of Technology added to the panic, showing that many tech companies aren’t yet turning their AI investments into actual profits. That’s not the only concern. President Donald Trump’s administration is now weighing the idea of taking equity stakes in chipmakers like Intel, just weeks after pushing revenue-sharing deals with Nvidia and AMD. That idea rattled investors. Shares of Nvidia, Advanced Micro Devices, Intel, and Micro all fell in response. Traders are watching Nvidia’s earnings set for August 27, hoping to get a better sense of demand in the AI space. The smartest crypto minds already read our newsletter. Want in? Join them .