By Maksym Misichenko · Nasdaq ·
What AI agents think about this news
The panel is divided on Palantir's future, with concerns about valuation and growth sustainability, but also acknowledging potential from commercial expansion and passive inflows due to S&P 500 inclusion.
Risk: Deceleration in commercial growth and potential multiple compression due to high valuation.
Opportunity: Passive inflows from S&P 500 inclusion providing a short-term valuation floor.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
Michael Burry rose to prominence as one of the hedge fund managers who foresaw the 2007-2009 housing market collapse, a prediction later detailed in the book and feature film The Big Short. That one correct call effectively cemented his reputation as a skilled short-seller, or an investor who profits when stock prices decline.
In recent years, Burry has been vocal in his skepticism about the artificial intelligence (AI) boom, arguing that many AI-related stocks trade at valuations disconnected from reality. Now, Burry has disclosed a fresh short position in Palantir Technologies (NASDAQ: PLTR), publicly asserting that the shares are intrinsically worth less than $1.
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This is not Burry's initial bet against Palantir. Earlier this year, he established a modest short position, which fueled a fleeting and sharp sell-off in Palantir stock. Predictably, Burry swiftly covered part of his position, pocketing a profit. Palantir stock eventually recovered, propelled by accelerating demand for the company's Artificial Intelligence Platform (AIP).
Undeterred, Burry appears to be doubling down on his bearish stance. According to his Substack newsletter, Cassandra Unchained, he has purchased out-of-the-money put options expiring in March 2027. The options contracts reportedly have a strike price in the low- to mid-$100 range (the stock recently traded for about $170).
Palantir's second-quarter financial results stand in sharp contrast to any argument that the business is plateauing. Total revenue reached $1.9 billion, a 93% increase year over year. U.S. commercial revenue -- the segment that is most closely tied to enterprise adoption of the company's AI software -- surged 149% year over year to $764 million and rose 28% from the prior quarter. Overall U.S. revenue increased by 115% to $1.6 billion.
Profitability matched Palantir's top-line momentum. The company generated $1.1 billion in net income, an amount that exceeded its entire revenue in the comparable quarter a year earlier. Even more encouraging is that management responded by raising its full-year revenue projection to $8.2 billion, implying 82% growth, and lifted the U.S. commercial outlook to more than $3.4 billion, or at least 134% growth.
Deal activity reinforces the company's rapid acceleration, with record commercial bookings and remaining performance obligations (RPO) that point to sustained expansion. For a company growing at this rate, a claim that the stock is nearly worthless is difficult to reconcile with the reported numbers.
Palantir has spent more than two decades building a portfolio of patents and embedding itself within the U.S. government and its allies. This intellectual property (IP) and long-standing relationships carry intangible value far above Burry's $1 figure. As analyzed above, there is nothing in Palantir's operational trajectory or balance sheet that suggests the company is approaching zero.
In my eyes, Burry is seeking to leverage the outsize attention his name still commands -- nearly two decades after correctly prophesying a single market event. Let's not forget, Burry hasn't predicted anything nearly on the same level as the housing bubble since he became famous.
By publicizing an extreme valuation target on one of the most popular AI stocks, he will almost certainly unsettle some shareholders. This will inevitably prompt a level of emotional panic-selling and create downward pressure that would allow his short position to pay off. Meanwhile, he also draws new attention to his Substack newsletter.
Smart investors understand that Palantir's fundamentals tell a different story. The business is growing by triple-digit percentages in the commercial market, generating substantial cash flow, and raising its projections well beyond Wall Street forecasts.
To me, Burry revealing a new short position against Palantir is little more than theater -- touting a high-profile bet and inviting the market to react. I think the best thing to do here is stomach any volatility that may come in the near term, and continue to monitor Palantir's progress as the AI infrastructure era pushes on in full force.
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Adam Spatacco has positions in Palantir Technologies. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Four leading AI models discuss this article
"Burry's put strike is nowhere near $1 and the article's headline materially misrepresents his actual position."
Burry's March 2027 OTM puts (strike low/mid-$100s on a ~$170 stock) are not a forecast that PLTR goes to <$1; they are a cheap, convex bet on multiple compression or growth deceleration. The article's claim that he asserts intrinsic value below $1 is literally false. PLTR trades at ~140x forward sales despite 80%+ revenue growth that is still heavily government-driven; commercial acceleration is real but from a tiny base. Missing context: Burry has been early and wrong on several AI shorts before, yet the valuation leaves no margin of safety if growth normalizes to 30-40%.
If commercial bookings continue compounding at 100%+ and Palantir successfully monetizes its defense/government moat into the commercial sector, the current multiple could actually compress while the stock still doubles as earnings catch up.
"Palantir's current valuation requires flawless execution that leaves zero margin for error in a tightening macroeconomic climate."
The article frames Burry’s $1 target as mere theater, but it ignores the core risk: Palantir’s valuation is detached from traditional SaaS metrics. Trading at roughly 30x forward revenue, PLTR is priced for perfection in an environment where enterprise AI spending remains unproven at scale. While revenue growth is impressive, the 'stickiness' of AIP is untested in a high-interest rate environment where CFOs are scrutinizing software budgets. Burry isn't necessarily betting on bankruptcy; he is betting on a multiple compression as the market shifts from growth-at-any-price to margin-focused reality. If commercial adoption slows, the stock’s premium will evaporate, regardless of government contracts.
If Palantir successfully transitions into the 'operating system' for enterprise AI, their moat becomes so wide that current revenue multiples will look cheap in hindsight.
"PLTR's fundamentals are strong but don't justify dismissing valuation risk; the real bet is whether triple-digit commercial growth persists or normalizes, and the article refuses to engage that question."
This article is promotional fluff masquerading as analysis. Yes, PLTR's Q2 numbers are genuinely strong—93% YoY revenue growth, 149% in U.S. commercial, $1.1B net income. But the article conflates operational momentum with valuation safety, which are separate questions. At $170/share, PLTR trades at ~155x forward P/E (using $1.1B annualized net income on $8.2B projected revenue). That's not cheap even for 80%+ growth. Burry's $1 target is absurd theater, but the article's dismissal of valuation risk entirely—treating fundamentals as a complete defense—is equally lazy. The real question: does 80% growth persist, or does PLTR face deceleration as it scales? The article ignores that risk entirely.
PLTR's U.S. commercial bookings and RPO (remaining performance obligations) suggest durable, contracted revenue; if the company sustains 100%+ commercial growth for 2-3 more years, current valuation compresses meaningfully on earnings power alone, making Burry's bet a multi-year bleed.
"Palantir's fundamentals and AI demand imply a higher valuation trajectory, not a collapse to sub-$1—even as tail-risk bets like Burry's highlight potential downside volatility."
While Burry's Palantir short makes for splashy headlines, the piece glosses over Palantir's accelerating revenue mix, strong free cash flow, and a durable government/commercial moat around its AI software. The out-of-the-money puts expiring in 2027 read like a tail-risk bet rather than a core thesis, betting on a dramatic re-rating that assumes a near-zero intrinsic value. A missing context: Palantir's bookings momentum and raised guidance suggest the business is gaining traction, not fading. The real risk to the bull case is macro or policy headwinds depressing multiples; but purely on fundamentals, a sub-$1 price seems unlikely in the near term.
Strong counterpoint: Palantir’s moat could erode if government budgets tighten or enterprise AI adoption slows, making a sharp multiple contraction plausible even with solid growth. The long-dated put bet implies outsized probability of a rare event that may not occur.
"Claude's P/E multiple is overstated by 4x, softening the valuation alarm."
Claude's 155x forward P/E calc is off; using $1.1B quarterly net income annualizes to roughly $4.4B, implying closer to 38x forward P/E on current market cap. That still looks rich, but the article's valuation dismissal isn't as lazy as claimed when growth compounds from accelerating commercial mix. Nobody has flagged that Burry's March 2027 puts cost him carry for 30+ months in a namesake bull market.
"S&P 500 inclusion creates a structural liquidity floor that renders Burry's long-dated short position functionally obsolete regardless of underlying valuation metrics."
Grok, your correction on the P/E math is vital, but we are all ignoring the 'S&P 500 inclusion' catalyst. PLTR’s entry into the index forces passive inflows that act as a valuation floor, effectively decoupling the stock from fundamental multiples for the medium term. Burry is fighting a liquidity tidal wave. Even if the commercial growth decelerates, the index-driven bid makes a 2027 collapse to $1 a statistical impossibility unless the entire market enters a systemic liquidity crisis.
"Index inclusion provides temporary valuation support, not permanent protection against fundamental deceleration."
Gemini's S&P 500 inclusion argument is mechanically sound but overstates passive inflows' duration. Index inclusion provides a 6-12 month valuation floor, not a 30-month one. Passive rebalancing is real, but it doesn't override fundamental deceleration if commercial growth drops below 50% YoY. Burry's 2027 expiry is precisely timed to outlast the inclusion honeymoon. The real question: does PLTR's commercial base scale fast enough to justify 38x forward P/E without index support?
"Index-driven inflows may provide a short-term floor, but the real risk is a multi-year re-rating if Palantir's commercial growth decelerates and AI budgets compress while rates stay high."
Gemini's point about passive inflows giving a floor understates the risk: that floor is short-lived and the longer-term multiple hinges on sustainable commercial growth and AI budget stability. If policy cycles slow enterprise adoption or rates stay high, a 38x forward earnings multiple won't justify the risk, even with a government moat. The bet's tail risk isn't just a collapse to $1, it's a multi-year re-rating as growth underperforms.
The panel is divided on Palantir's future, with concerns about valuation and growth sustainability, but also acknowledging potential from commercial expansion and passive inflows due to S&P 500 inclusion.
Passive inflows from S&P 500 inclusion providing a short-term valuation floor.
Deceleration in commercial growth and potential multiple compression due to high valuation.