‘Big Short’ Investor Michael Burry Takes Aim at Palantir’s AI Rally with a Simple Six-Word Warning
For investors riding the high-flying momentum of Palantir Technologies, the last two years have been nothing short of a dream. The data analytics company, powered by massive government contracts and a surging narrative around its Artificial Intelligence Platform, or AIP, has seen its stock price soar, transforming it into one of the market’s biggest success stories in the post-pandemic era. It’s the kind of epic run that can turn even the most cautious investor into a staunch believer.
That is, until Michael Burry—the legendary investor famous for his profitable bet against the housing market before the 2008 financial crisis—stepped into the debate. The notorious market skeptic, whose moves are watched closely by traders worldwide, has delivered a curt, six-word verdict that serves as a profound caution to anyone buying into the hype: “These aren’t the charts you’re looking for.”
The AI Bubble Thesis
Burry’s sentiment, often shared through cryptic social media posts, wasn’t a casual observation. It was the headline for a comprehensive, deep-dive critique into the company’s fundamentals and its eye-watering valuation. The core of his argument is a classic “Big Short” thesis: Palantir’s price is floating far beyond what its underlying business can fundamentally justify. He even titled his full critique “Palantir’s New Clothes,” drawing a direct parallel to the classic fairy tale where a boastful emperor is actually unclothed, suggesting the company’s valuation lacks real substance.
The company, which enjoyed a monster run through 2024 and 2025, has been rewarded for its accelerating growth and impressive profit margins. For instance, Palantir recently delivered stellar quarterly results, crushing Wall Street estimates and showcasing the strength of its US commercial business, which saw a massive surge in growth. CEO Alex Karp has repeatedly touted the company’s “truly iconic” performance.
However, Burry contends that the stock is currently being valued as a clean, high-margin software-as-a-service (SaaS) giant, which, in his view, is not the reality of its operations. He pointed out a brutal financial history, noting that the company was deeply unprofitable for years and only recently achieved profitability, primarily thanks to sticky, government-backed contracts.
A Wide Range, But a Bearish Stance
To put a number on his skepticism, Burry laid out a wide range of potential “worth” scenarios for the stock, starting as low as $21 per share and stretching up to $146. The headline figure that caught the market’s attention, however, was his rough fair value warning of $46 a share, drastically below where the stock had been trading.
While he made it clear he was not issuing a conventional Wall Street price target, the message was unmistakable. The famed investor put his money where his mouth is, acquiring a bearish position in the form of put options. These options give him the right to sell the stock at a set price in the future, effectively betting that the AI-driven winning streak “will not endure.”
The “priced for perfection” valuation, Burry argues, leaves virtually zero margin for error. As the broader AI sector experiences intense scrutiny, Burry’s stark warning to Palantir investors is a critical reminder that even the hottest stocks can be vulnerable to a painful correction when market enthusiasm outpaces business reality.