Michael Burry Bets Against Palantir, Citing Extreme Overvaluation

Michael Burry, the investor famous for his successful bet against the subprime mortgage market in 2008, has signaled a strong bearish outlook on Palantir Technologies (PLTR). Burry has disclosed the acquisition of put options targeting a significant price decline by late 2026 and mid-2027. Specifically, Burry has entered positions in December 18, 2026, puts with a $100 strike price and June 17, 2027, puts with a $50 strike price. These trades indicate a conviction that the AI software firm will lose a substantial portion of its market value over the next 18 to 24 months, despite a general analyst consensus target of $191.29. The core of Burry's thesis rests on valuation. Palantir is currently trading at nearly 100 times its projected annual earnings of $1.30 per share. Even with optimistic forecasts projecting earnings per share to rise to $1.80 next year and $2.50 by 2028, the stock remains priced at over 50 times its anticipated future earnings. This valuation stands in stark contrast to broader market benchmarks and industry peers. The S&P 500 currently maintains a forward price-to-earnings ratio of 21, while AI leaders like Microsoft and Alphabet trade at roughly 20 and 25 times their projected earnings, respectively. While Palantir recently saw a price rally following public praise from President Donald Trump regarding the platform's military utility, Burry remains unmoved. He suggests that while narrative-driven momentum can sustain high prices temporarily, the stock's fundamental value remains far below current trading levels.