Michael Burry (Trades, Portfolio) is betting against Palantir Technologies PLTR again, adding March 2027 put options with strike prices in the low-to-mid $100s as the famed investor challenges one of the market's richest AI valuations. The trade puts renewed focus on whether Palantir's explosive growth can continue fast enough to justify a stock still trading near historic highs despite being down roughly 1.5% in 2026.
Palantir builds data-integration and artificial-intelligence software used by governments, defense agencies and corporations. Its platforms help customers combine large datasets, automate workflows and deploy AI models, with revenue generated primarily through software contracts with government and commercial clients.
Burry bought the puts as option prices fell to multi-month lows, making downside protection cheaper as implied volatility eased. He had previously partially covered a short position around $107, but the latest trade signals he still sees meaningful downside risk.
That bearish stance comes despite exceptional operating momentum. Palantir's second-quarter revenue surged 93% year over year to $1.94 billion, while U.S. commercial revenue jumped 149% to $764 million. The company closed 220 deals worth at least $1 million and generated $1.22 billion of adjusted free cash flow during the quarter.
The tension is valuation. According to the supplied Stone Fox Capital analysis, Palantir trades above 50 times 2026 sales and nearly 100 times free cash flow. Burry's trade effectively wagers that even extraordinary growth may not protect the shares if investors start demanding lower multiples.
Investor Takeaway On Palantir Stock
Palantir now has little room for operational disappointment. For the third quarter, management expects revenue of $2.160 billion to $2.164 billion and adjusted operating income of $1.292 billion to $1.296 billion. Full-year revenue guidance stands at $8.150 billion to $8.158 billion, with adjusted free cash flow expected between $4.5 billion and $4.7 billion.
Investors should watch whether U.S. commercial growth, deal values and free-cash-flow margins remain strong enough to support the premium valuation. Continued upside surprises could undermine Burry's bearish thesis. Even a modest slowdown, however, could make valuation compression the bigger risk than weakening fundamentals.
