Palantir shares slide after ‘Big Short’ star Michael Burry reveals $912m position

Key topics:Palantir shares fell 8% amid concerns over high valuation and AI rally.Hedge fund Michael Burry bets against Palantir and Nvidia with puts.Revenue grew 63%, beating estimates, but investors seek 2026 outlook..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Lizette Chapman.Palantir Technologies Inc. shares dropped almost 8% on Tuesday, tumbling on concerns about the company’s lofty valuation and the sustainability of the AI rally, even after it topped analyst estimates for third-quarter sales and raised its annual revenue outlook.Adding to Wall Street’s anxiety, hedge fund manager Michael Burry disclosed bearish wagers on Palantir and artificial intelligence chip leader Nvidia Corp. Burry’s Scion Asset Management bought Palantir put options, which increase in value as shares decline, according to the latest 13F regulatory filing.The stock had soared more than 170% this year through Monday, when it closed at a record. The company had a price-to-sales ratio of 85 as of Friday — the highest in the S&P 500 Index. “We are fundamental fans and the numbers speak for themselves,” analysts for Jeffries wrote in a note Tuesday, but they added that Palantir’s price-to-sales ratio was so high that it was safer to bet on AI in other ways. .Read more:.Palantir shares fall 10% on US defense budget cut concerns.“All these numbers are completely disengaged from fundamentals,” D.A. Davidson’s Gil Luria said in an interview with Bloomberg Television. “This is a company with a $4 billion run rate that’s growing 63%. There’s nothing even remotely close to that, which is how we got to the situation where the valuation is at unprecedented levels.”Palantir declined to comment. Nvidia didn’t respond to a request for comment. .Mandeep Singh, senior analyst at Bloomberg Intelligence, said that investors likely wanted more guidance about the following year. Palantir gave a forecast for the current quarter, Singh said, but “I think everyone wanted some sense of 2026.”Revenue increased 63% to $1.18 billion in the period ended in September, the company said Monday in a statement. Analysts, on average, estimated $1.09 billion. In the current quarter, sales will be about $1.33 billion, compared with an average projection of $1.19 billion..Palantir has reported revenue above analyst estimates for 21 consecutive quarters, according to data compiled by Bloomberg.“We are in a nosebleed zone,” Palantir Chief Executive Officer Alex Karp said in an interview Monday. “No one else is here.”Burry, who became a household name after his bet against mortgages in the late 2000s was featured in The Big Short movie, took to X last week with a cryptic warning to retail investors about market exuberance. “Sometimes, we see bubbles,” he wrote. “Sometimes, there is something to do about it. Sometimes, the only winning move is not to play.”Karp has had a long-running and unusually colorful dispute with investors who have shorted his company. At one point, he said short sellers “love pulling down great American companies” to pay for their cocaine. Earlier this year, he joked that he loved the idea “of getting a drone and having light fentanyl-laced urine spraying on analysts that tried to screw us.” In an interview on CNBC on Tuesday, he called betting against the AI revolution “crazy.” .Palantir’s growth has been particularly strong in the US — where it gets a majority of its revenue — but has lagged overseas. On a call with investors, Karp said “growth is being held down by a stagnant Europe, which is still a significant part of our business.”Profit, excluding some items, was 21 cents a share, compared with analysts’ average estimate of 17 cents.Palantir’s quarterly sales to commercial customers in the US increased 121% from the period a year earlier to generate $397 million. Palantir’s government work in the US increased 52% in the third quarter to $486 million.In recent years, Palantir has been one of the biggest public beneficiaries of the artificial intelligence boom. The company sells its AI software to both governments and companies, and has become a key provider to the US and its allies. Founded in 2003 with backing from Peter Thiel and the venture arm of the CIA, Palantir’s software organizes information from disparate data sources and prompts customers to make better decisions, using AI tools to make those calls more quickly. In corporate settings, this can mean finding ways to save money. On the battlefield this can mean shortening the time from identifying a threat to neutralizing it..Since its market debut via a direct listing in 2020, Karp has built a dedicated following among retail investors who affectionately call him “Daddy Karp” on Reddit. At the same time, he has antagonized Wall Street and dismissed calls to reverse Palantir’s strong support for Israel and for US border enforcement..Read more:.Palantir’s $73bn meltdown hands shorts rare $1.6bn payday.In a characteristically bombastic letter to investors, Karp said that the company’s ascent to its $488 billion valuation “has confounded most financial analysts and the chattering class, whose frames of reference did not quite anticipate a company of this size and scale growing at such a ferocious and unrelenting rate.”Sounding a patriotic note, Karp also extolled the virtues of the US. In the investor letter, he quoted the poet William Butler Yeats, writing, “things fall apart; the center cannot hold.” Adding, “Today, America is the center, and it must hold.”In addition to working on US defense projects, Palantir also has deals with US allies, including most recently Poland. The company is planning to work with the country on cybersecurity and AI. Although the shares dipped in after-hours trading Karp was ebullient on the call with investors. “By any normal or even reasonable standard, these are not normal results. These are not even strong results,” he said. “These are arguably the best results that any software company has ever delivered.”.© 2025 Bloomberg L.P.

Palantir shares slide after ‘Big Short’ star Michael Burry reveals $912m position

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