Key Takeaways
- The Big Short investor Michael Burry acquired March 2027 put contracts on Palantir targeting strike prices in the $100-$110 range, far below the stock’s current price near $173.
- Chief Technology Officer Shyam Sankar divested $5.45 million worth of shares on August 6, executed through a pre-arranged Rule 10b5-1 trading plan.
- Second-quarter revenue climbed to $1.94 billion, representing a 94% year-over-year surge and exceeding analyst projections of $1.81 billion.
- Burry’s bearish thesis revolves around extreme valuation metrics: the company trades at more than 50x projected 2026 revenues and approximately 100x free cash flow.
- Analyst consensus stands at Moderate Buy with a $197.21 average price target, suggesting roughly 12.5% potential upside from present trading levels.
The legendary investor behind “The Big Short” has renewed his bearish stance on Palantir, this time with an extended time horizon. Michael Burry recently revealed he has purchased March 2027 put contracts on PLTR, targeting strike prices between the low and mid-$100s, even as shares hovered around $173 during Tuesday’s pre-market session.
Palantir Technologies Inc., PLTR
The margin between current prices and his strike prices is substantial. This isn’t a tactical trade anticipating a modest correction. Instead, Burry appears positioned for a significant downward move spanning the coming months.
The disclosure came through his Cassandra Unchained Substack newsletter. Notably, Burry had previously unwound portions of an earlier short position around the $107 level. He initiated these fresh put positions when options premiums dropped to multi-month lows, allowing for more favorable entry pricing.
While PLTR remains down approximately 1.4% for the year, the stock has skyrocketed over 40% in merely five trading sessions. Such dramatic movements inevitably attract market attention, including from contrarian investors.
The Valuation Argument Driving Burry’s Bearish Position
Burry’s skepticism doesn’t target Palantir’s operational performance. He has openly recognized the company’s impressive growth trajectory. His primary concern centers on valuation metrics.
In recent commentary, he drew comparisons between Palantir and established defense contractors including Northrop Grumman, General Dynamics, Lockheed Martin, and L3Harris. His underlying message suggests investors are essentially paying for Palantir alone what they could alternatively spend on an entire portfolio of proven defense industry players.
According to bearish analysis from Stone Fox Capital, the stock currently trades above 50 times anticipated 2026 revenues and approaches 100 times free cash flow. Following similar valuation extremes in late 2025, Palantir experienced an approximately 50% drawdown. Burry seemingly anticipates history may repeat itself.
Executive Offloads $5.4M in Shares, Though Timing Was Pre-Planned
Shyam Sankar, Palantir’s Chief Technology Officer, divested 35,000 Class A shares on August 6, generating proceeds of $5.45 million. The transaction occurred at price points between $153.40 and $157.44 per share.
The critical context here involves the transaction structure. This sale was conducted through a Rule 10b5-1 trading arrangement established on March 11, significantly predating the recent price appreciation. Since Sankar scheduled this transaction months beforehand, it shouldn’t be interpreted as a signal regarding his current outlook on the company’s prospects.
Following this transaction, Sankar maintains direct ownership of 642,786 Class A shares. An additional 599,899 shares are held in trust.
According to TipRanks tracking, insiders have sold $43.7 million in total over the trailing three-month period, with the platform indicating a Negative Insider Confidence Signal stemming from two informative transactions during this timeframe.
Palantir’s second-quarter performance delivered positive catalysts for optimistic investors. Revenue reached $1.94 billion, marking a 94% year-over-year increase and surpassing the $1.81 billion analyst estimate. Adjusted earnings per share landed at $0.41, comfortably exceeding the $0.34 Wall Street consensus.
Management provided guidance calling for approximately $2.16 billion in third-quarter revenue and around $8.15 billion for the complete 2026 fiscal year.
Deutsche Bank analyst Brad Zelnick elevated PLTR to a Buy rating from Hold, maintaining his $200 price objective. Meanwhile, BofA’s Mariana Perez Mora reaffirmed her Buy rating alongside a $255 price target, representing the Street’s most bullish projection.
TipRanks consensus data shows PLTR rated as a Moderate Buy with an average analyst price target of $197.21.
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