Michael Burry
Author of Cassandra Unchained, Former Hedge Fund Manager at Scion Asset Management
Palantir's reliance on pay-as-you-go service with refunds makes customer cancellations and sudden earnings declines or write-downs a serious risk as AI and high SaaS prices pressure the business. Its 10-Q warns of these risks. Anthropic can and will easily replace Palantir with an all-in-one platform under Democratic control of the legislative branches. x.com x.comÂ
Palantir's roughly $500B market cap and 80x sales make it prudent to trim exposure despite continued affection for the company. Its tenfold run has already delivered substantial gains, not just the beginning; smaller speculative positions are getting crushed in this environment. x.com x.comÂ
Continued improvement in fundamentals and technicals could carry Palantir to megacap scale. A $1 trillion market cap is a realistic destination for strong growth companies, and Palantir appears on that path, though its timing is uncertain. Drawdowns remain opportunities to accumulate until the thesis changes. x.comÂ
Palantir at 50x sales is not undervalued, despite CEO Alex Karp saying on CNBC that the company is systemically undervalued. Insiders are selling shares like hot cakes, which makes his claim look false. x.comÂ
Palantir is overvalued, trading around 100 times forward earnings, 161 times trailing earnings and 73 times sales. x.comÂ
Palantir may be undervalued because the market values it as a software company while its opportunity is much bigger. It spans AI deployment, government contracts, enterprise adoption and mission-critical data infrastructure, and expensive stocks can stay expensive when the business keeps expanding. x.comÂ
Palantir would have to fall a lot to be worth buying, because its valuation assumes years of near-flawless execution. That future is too distant to predict with confidence: a new competitor could emerge, the industry could change structurally, or unforeseen events could reshape the landscape. Investing in a company's future still requires that future to be somewhat predictable. x.com x.comÂ
Palantir is still expensive even after falling about 45% from its highs, so it is a great business but not yet a great stock to add. At its $207 peak it priced in perfection, at roughly 70x 2026 sales and 230x trailing earnings; near $113 it trades at about 38x sales and 127x earnings as the business keeps executing. Interest returns near $100, with more aggressive buying in the $80-90 range or if the stock moves sideways long enough for revenue and earnings to grow into the multiple. x.comÂ
Palantir's government contract activity is growing sharply, supporting its resilience despite the share-price pullback. Its $2.1 billion in 12-month obligations is up 184% from the prior year, among the strongest increases tracked. The Cryptic Bottom Index remains green despite the pullback. Its score is among the highest in the Cryptic Research System, led by growth and profitability, though catalysts and valuation score weakest. x.com x.com x.comÂ
Palantir still trades at 87 times sales even after falling 20% this year. x.comÂ