Palantir’s Record Revenue Can’t Shake Michael Burry’s Bearish Bet or Valuation Concerns

Despite surging 85% revenue and lifted guidance, Palantir's extreme valuation—over 150x P/E—draws Michael Burry’s short bet, technical sell signals, and a 34% drop from highs.

The legendary investor who made a fortune betting against subprime mortgages has set his sights on a different target: Palantir Technologies. Michael Burry has built a short position against the data-analytics firm, adding a fresh layer of tension to a stock that just delivered the strongest quarterly results in its history yet has seen its share price tumble 34% from its 52-week high.

The contradiction is stark. First-quarter revenue surged 85% year over year to $1.63 billion, smashing the Wall Street consensus of $1.54 billion. Adjusted earnings per share of $0.33 came in a nickel above expectations. Palantir’s US commercial business more than doubled, climbing 133% to $595 million, while US government revenue jumped 84% to $687 million. The company lifted its full-year 2026 revenue forecast to $7.656 billion — well above the previous market view of $7.27 billion and the largest upward revision in its history.

Execution, however, has been no match for valuation. Even after a 16% year-to-date decline, the stock trades at a forward price-to-earnings multiple somewhere between 110x and 154x depending on the model used. By comparison, Nvidia trades at roughly 30x forward earnings, while Datadog and CrowdStrike hover in the 50s and 70s, respectively. The price-to-sales ratio stands at about 66, and the trailing P/E exceeds 150. Palantir’s market capitalisation remains above $200 billion, making it one of the most richly valued mega-cap software companies in history.

That gap between growth and valuation has drawn in both bulls and bears. Nineteen of 28 analysts maintain a buy rating, with an average price target roughly 42% above current levels. Yet the technical picture offers little comfort. The relative strength index sits at 82.4 — deep in overbought territory — and the annualised volatility is near 45%. The stock closed at EUR 119.88, about 14% below its 200-day moving average of EUR 138.62, a level that many technicians interpret as a bearish signal.

Burry’s short bet amplifies the unease. His position, disclosed in recent filings, echoes the skepticism of investors who question whether Palantir’s commercial momentum can sustain the kind of multiple that rivals like Datadog and CrowdStrike — also AI beneficiaries — do not command. The concern is sharpened by a slower international performance: the rest-of-world commercial business expanded just 26%, a fraction of the US pace.

Amid the valuation debate, Palantir is waging two high-stakes battles in Washington. The company has filed a legal challenge against the Defense Intelligence Agency over its MARS programme, arguing that the agency is wasting taxpayer money by developing in-house data-analysis tools rather than adopting commercial software. If Palantir prevails, the ruling could open the door for private solutions across the broader US security apparatus.

At the same time, it is competing for a slice of the Federal Aviation Administration’s SMART modernisation push — a £32.5 billion project that includes an AI-powered collision-avoidance system designed to give air-traffic controllers up to two hours of advance warning. Palantir is vying alongside Thales and Airspace Intelligence for the contract, with $12.5 billion already approved by Congress. Wedbush analysts see the FAA deal as a potential long-term catalyst, noting that Palantir brings the deepest government relationships of the three bidders.

Neither the legal manoeuvre nor the prospective federal win has been enough to lift the stock. The company’s order backlog hit $11.8 billion — up 98% — and the US government segment’s 84% growth was fuelled by rapid adoption of its AIP artificial-intelligence platform. But the market is fixated on the same question: can a triple-digit earnings multiple ever be justified, even for a company that has accelerated revenue growth for 11 consecutive quarters?

The answer, for now, remains elusive. Palantir is delivering the numbers that would normally command a premium. But the premium itself has become the story — and until one of those Pentagon or FAA contracts becomes a signed deal, the tug-of-war between record-setting operations and a punishing valuation is unlikely to subside.