Palantir in Focus as Burry’s AI Valuation Skepticism Meets Defense-Regulatory Progress

Palantir faced a tug-of-war in trading yesterday, with a sharp, negative take on AI-related valuations from Michael Burry contrasting against a regulatory milestone in U.S. defense technology. The net result at the close was a stock under pressure, finishing lower as skeptical sentiment outweighed support.

Key data at a glance:
- Close: $129.13, down 4.83%
- Volume: 73.4 million shares
- D.A. Davidson: Neutral; price target $180
- Burry scenario: potential drop to about $46 per share (roughly -66%)

Burry?s take on AI valuations

Investor and investor-relations watchers turned their attention to Michael Burry?s detailed, notably bearish assessment of the current AI investment wave. He centers his argument on whether software valuations tied to AI can be sustained over time. For Palantir, his analysis implies a downside risk of up to 66%, pointing toward a target near $46 per share.

Specific points highlighted by Burry include concerns around depreciation or impairment risks tied to data-center assets and what he views as an excessive valuation for AI-enabled software providers. He also warned that Palantir?s recent string of wins might not endure. The market reaction was swift, with notably higher trading activity reflecting the debate.

Analysts push back

D.A. Davidson stood by its stance despite the opposing signal. The firm reaffirmed a Neutral rating and a $180 price target for Palantir, arguing there isn?t a new cause for concern in Burrys critique.

Their rationale centers on Palantir?s positioning: unlike many AI-focused software peers, Palantir reportedly delivers tangible benefits from AI in business-critical and mission-critical systems. The ongoing debate underscores how hot and contested the valuation landscape has become for high-growth AI names.

DISA expands approvals ? deployment on the horizon

Beyond the price-discussion, Palantir announced a regulatory development on the same day. The Defense Information Systems Agency (DISA) granted authorization to broaden provisional approvals for Federal Cloud Service Forward Level 5 and Impact Level 6.

This clearance enables Palantir to roll out its technology stack, including the Artificial Intelligence Platform (AIP), not only in cloud environments but also on-premises and at the edge. In practical terms, this allows deployments closer to operating sites and across varying hardware configurations. The government notes that such authorizations support more efficient, multi-vendor architectures?an important element for modern security and defense operations.

Backdrop to the earnings picture

The regulatory progress sits alongside Palantir?s latest earnings context. The company reported strong fourth-quarter results, with revenue of $1.41 billion, up 70% year over year. The U.S. Commercial segment delivered a striking 137% increase. For the full-year 2026, management guided toward approximately $7.19 billion in revenue.