Palantir Technologies (PLTR), the poster child of the artificial intelligence (AI) revolution, has found itself at the center of a storm stirred by none other than Michael Burry. Yes, that Michael Burry, the man who bet against the housing market in 2008 and walked away with a fortune while the rest of Wall Street went up in smoke.
This time, Burry’s Scion Asset Management dropped jaws with a $912 million put option position against Palantir. 5 million put contracts is no small whisper of doubt. His move came right after his cryptic caution to retail investors about the bubble-like exuberance floating around AI stocks.
For the uninitiated, a put option gives the holder the right to sell a stock at a pre-decided price, implying that Burry is expecting PLTR stock to head downhill. Now, the twist is that Palantir, fresh off record earnings, watched its stock nosedive 7.94% on Nov. 4 after the filing went public and the company reported quarterly results.
Palantir’s CEO Alex Karp was not having any of it. He fired back, calling the short bet “absurd” and “bats— crazy,” standing firm on Palantir’s dominance in the AI universe.
The tension is palpable. One side is betting on the fall of a tech titan, the other is swearing on its rise. The real question, though, is where investors stand when titans clash. Let us peel back the layers of this story and see which side of the trade time will prove right.
Palantir Technologies, headquartered in Denver, Colorado, is a data powerhouse redefining how the world processes information. Holding a market cap of nearly $415 billion, its software platforms, Gotham, Foundry, and the AI-driven AIP, have become indispensable tools for governments, militaries, and corporations.
Despite seeing a recent drop, shares of PLTR have performed well over the longer term. Over the past 52 weeks, PLTR shares have skyrocketed 207%. Even the last six months alone brought a sharp 55.4% surge.
Palantir’s valuation has reached stratospheric levels, trading at 384 times forward earnings and 155 times sales, vastly exceeding industry norms. Such multiples suggest investors are paying an extraordinary premium, one rarely seen since the dot-com bubble. So, even though Palantir delivered blockbuster earnings, the stock recently tumbled as markets questioned whether its growth truly justifies this sky-high price tag.
