Key Highlights
- Legendary investor Michael Burry secured March 2027 put contracts on Palantir, selecting strike prices in the $100-range while shares hover near $173.
- On August 6, Palantir’s Chief Technology Officer Shyam Sankar divested $5.45 million worth of shares through a pre-established Rule 10b5-1 trading arrangement.
- The company delivered second-quarter revenue of $1.94 billion, representing a 94% year-over-year increase and surpassing analyst projections of $1.81 billion.
- The primary focus of Burry’s bearish thesis revolves around valuation metrics: shares currently command over 50 times projected 2026 sales and approach 100 times free cash flow.
- Analyst consensus reflects a Moderate Buy rating with a mean price objective of $197.21, suggesting approximately 12.5% potential appreciation.
Michael Burry has returned to wagering against Palantir, this time extending his timeline considerably. The prominent investor revealed new put option positions expiring in March 2027 on PLTR, targeting strike prices in the lower-to-middle $100 range, even as the stock commanded approximately $173 during Tuesday’s pre-market session.
Palantir Technologies Inc., PLTR
The disparity is significant. Burry isn’t anticipating a modest correction. His positioning suggests expectations for a substantial downturn spanning the coming months.
The transaction was revealed through his Cassandra Unchained Substack publication. Burry had previously unwound portions of an earlier short position around the $107 level. He initiated these fresh put positions during a period when option premiums had declined to multi-month lows, providing a more favorable cost basis.
PLTR has declined roughly 1.4% since the beginning of the year, though shares experienced a remarkable surge exceeding 40% over just the previous five trading sessions. Such dramatic movements attract considerable market attention, with mixed sentiment among observers.
The Valuation Argument Driving Burry’s Bearish Position
Burry’s skepticism doesn’t stem from doubts about the underlying business fundamentals. He has recognized Palantir’s expansion trajectory. The concern centers squarely on the premium investors are currently accepting.
In a recent commentary, he drew comparisons between Palantir and established defense contractors including Northrop Grumman, General Dynamics, Lockheed Martin, and L3Harris. His argument highlights that investors could acquire an entire portfolio of proven defense industry leaders at a comparable valuation to Palantir’s standalone market capitalization.
According to bearish analysis from Stone Fox Capital, the stock commands more than 50 times anticipated 2026 revenue and approaches 100 times free cash flow multiples. Following elevated valuation levels in late 2025, Palantir experienced approximately a 50% correction. Burry seems positioned for historical patterns to potentially repeat.
Executive Divests $5.4 Million in Shares, Though Circumstances Warrant Consideration
Chief Technology Officer Shyam Sankar disposed of 35,000 Class A shares on August 6, realizing $5.45 million in proceeds. The transaction occurred at price points between $153.40 and $157.44 per share.
The critical context is that this divestiture occurred pursuant to a Rule 10b5-1 trading plan established on March 11, well in advance of the recent price appreciation. This indicates Sankar programmed the transaction months beforehand, suggesting it may not signal a shift in his assessment of the company’s prospects.
Following the sale, Sankar maintains direct ownership of 642,786 Class A shares. An additional 599,899 shares are held through a trust arrangement.
TipRanks tracking reveals $43.7 million in aggregate insider selling throughout the preceding three months, with the platform issuing a Negative Insider Confidence Signal attributed to two informative transactions during that timeframe.
Palantir’s second-quarter performance provided optimistic investors with compelling data points. Revenue reached $1.94 billion, marking a 94% year-over-year gain and exceeding the $1.81 billion analyst estimate. Adjusted earnings per share registered $0.41, topping the $0.34 consensus forecast.
Management issued guidance projecting approximately $2.16 billion in third-quarter revenue and roughly $8.15 billion for the complete 2026 fiscal year.
Deutsche Bank analyst Brad Zelnick elevated PLTR to Buy from Hold, maintaining his $200 price objective. Bank of America’s Mariana Perez Mora retained her Buy rating alongside a $255 Street-high target.
According to TipRanks, PLTR maintains a Moderate Buy consensus rating with a mean price target of $197.21.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
