Palantir’s Record Quarter Meets a Bearish Bet from Michael Burry

The numbers coming out of Palantir’s first-quarter report were nothing short of spectacular. Revenue surged 85% year-over-year to $1.63 billion, adjusted earnings per share hit $0.33 — beating analyst estimates on both fronts — and the company’s Rule of 40 score skyrocketed to an unprecedented 145%. Net income nearly quadrupled to roughly $870 million. The balance sheet is pristine: $8 billion in cash and zero debt.

Yet the stock dropped nearly 7% after the release, and the selling pressure has only intensified since. Palantir now trades at around €117, roughly 35% below its 52-week high from last November and down more than 18% year-to-date. The chart is ugly — the stock sits well below its 200-day moving average, with the downtrend firmly intact.

What’s going on? Two forces are colliding. First, a tiny blemish in an otherwise flawless quarter: US commercial revenue grew 133% but missed consensus by a mere $10 million. In a stock trading at 85 times forward earnings, that’s enough to spook the bulls. Second, and perhaps more telling, is the emergence of a high-profile bear.

Michael Burry — the investor who famously bet against subprime mortgages before the 2008 crisis — has opened a significant short position against Palantir. His put options on various instruments, including the data analytics firm, now make up nearly 7% of his portfolio. Burry isn’t just calling the valuation excessive; he’s explicitly betting against the business model and CEO Alex Karp’s strategy. He reportedly sees fair value for the stock in the low double digits.

Should investors sell immediately? Or is it worth buying Palantir?

That’s an extreme view, but it’s gaining traction. Insider selling has been relentless: over the past three months, management has dumped shares worth more than $435 million across dozens of transactions. For short sellers, that’s a powerful signal that even those closest to the business are cashing out.

The analyst community remains deeply divided. Citigroup and Wedbush have reiterated buy ratings with price targets as high as $230, pointing to exploding AI demand. Jefferies, by contrast, holds a $70 target and warns that growth will inevitably slow as the revenue base expands. The gap between the most bullish and most bearish targets is now over $150.

Management, for its part, is doubling down. The company raised its full-year 2026 revenue guidance to at least $7.65 billion — a figure that exceeds what the market had previously expected at the top end. CEO Alex Karp is sticking with his aggressive expansion plan, aiming to double US revenue again by 2027.

Palantir at a turning point? This analysis reveals what investors need to know now.

The next test comes in August, when Palantir reports second-quarter results. The company has guided for revenue of $1.8 billion in that period. If it delivers, the bears will have to recalibrate. If it stumbles, Burry’s bet could look prescient. For now, the market is voting with its feet — and the direction is down.

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