“Michael Burry, the legendary investor behind ‘The Big Short,’ has issued a stark bearish outlook on Palantir Technologies, pegging its fair value as low as $46 per share in a detailed critique — a potential 65-70% plunge from recent levels around $135. While his analysis raises valid questions about accounting practices, leadership, and long-term sustainability, the company’s explosive commercial growth, accelerating revenue momentum, expanding customer base, and dominant position in the AI-driven data analytics space tell a far more compelling bullish story that outweighs Burry’s concerns.”
Famed “Big Short” Investor Michael Burry Made a Dire Prediction About Palantir Stock. I Think He’s Dead Wrong.
Michael Burry has built a reputation as one of the sharpest minds in investing, famously profiting billions by betting against the subprime mortgage bubble. His recent deep dive into Palantir Technologies — a lengthy manifesto-style post — paints a grim picture for the AI and data platform company. Burry argues that Palantir’s valuation is detached from fundamentals, questioning everything from labor cost allocations in deployments that he claims inflate margins to the company’s corporate culture and reliance on narrative hype over substance. He outlines multiple valuation scenarios, with his base case landing at around $46 per share, implying a massive downside from current trading levels near $135. He has suggested the stock’s “winning streak” is unlikely to endure and that the company could see its market cap shrink significantly below $100 billion in the long run.
Burry’s bearish stance isn’t new; he has held put options on PLTR since at least late 2025, positioning against what he views as an overextended AI darling. Technical patterns he highlighted, such as a head-and-shoulders formation from the November 2025 peak around $207, reinforce his view of further declines toward supports near $100 or even a “landing area” slightly above $50.
Yet, after closely examining Palantir’s trajectory, Burry’s dire prediction appears overly pessimistic and disconnected from the accelerating realities on the ground.
Palantir has transformed from a primarily government-focused contractor into a high-growth commercial powerhouse. The company’s Artificial Intelligence Platform (AIP) has become a key driver, enabling rapid deployment of AI solutions across enterprises. Commercial revenue has surged dramatically in recent quarters, with year-over-year growth rates consistently in the triple digits for that segment. Overall revenue growth has remained robust, often exceeding 25-30% annually, while the company has achieved consistent profitability and positive free cash flow — milestones that eluded it for years.
A critical metric underscoring this shift is net revenue retention (NRR), which has climbed well above 130% in recent periods. This indicates that existing customers are not only sticking around but significantly expanding their spend on Palantir’s platforms. Such expansion signals deep entrenchment and sticky value, countering Burry’s assertions about questionable business model sustainability.
Customer acquisition has also accelerated. Palantir added hundreds of new commercial logos in recent years, penetrating industries from healthcare and manufacturing to finance and energy. Deals with major enterprises demonstrate the platform’s ability to solve complex, real-world data integration and AI challenges that generic tools struggle with.
Financially, Palantir’s gross margins remain exceptionally high — often in the mid-80% range — reflecting the software-heavy, scalable nature of its business. While Burry critiques labor allocation during deployments, this is a common practice in enterprise software rollouts where forward-deployed engineers customize solutions. As deployments mature and shift toward self-service usage via AIP, these costs should moderate, further boosting operating leverage.
The valuation debate is where Burry’s critique lands hardest. At around $135 per share, Palantir trades at a premium multiple — forward price-to-sales in the high teens to low 20s and elevated price-to-earnings — reflecting market enthusiasm for AI leaders. But this premium is justified by growth prospects that far outpace mature software peers. If commercial momentum continues, revenue could compound at 25-40% annually for several years, driving eventual margin expansion toward 30-40% operating levels. In such a scenario, the current multiple compresses meaningfully as earnings catch up.
Compare this to other AI-adjacent names: many trade at similar or higher multiples despite slower growth or less differentiated offerings. Palantir’s moat — rooted in secure, ontology-based data integration and battle-tested platforms — provides defensible positioning that generic cloud AI tools lack.
Burry’s focus on past cash burn and leadership quirks overlooks how far the company has come. Under CEO Alex Karp, Palantir has navigated controversies while delivering results that increasingly align with shareholder value creation. The stock’s pullback from 2025 highs has already tempered some froth, creating a more attractive entry for long-term believers.
Key Performance Highlights (Recent Trends):
Revenue Growth: Consistent 25-35% YoY, with commercial segment outpacing government.
Profitability: GAAP profitable, strong free cash flow generation.
NRR: 130%+, demonstrating expansion within customer base.
Customer Count: Rapid addition of high-value commercial clients.
Platform Adoption: AIP driving faster time-to-value and broader use cases.
In short, while Burry’s warnings merit attention — no stock is immune to corrections — Palantir’s fundamentals show a company firing on all cylinders in the AI era. The path to much higher intrinsic value seems more probable than the collapse he envisions. Investors betting against it may find themselves on the wrong side of one of the market’s most dynamic growth stories.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, a recommendation to buy or sell any security, or a solicitation of any kind. Investing involves significant risk, including potential loss of principal. Always conduct your own research and consult with a qualified financial advisor before making investment decisions.