Palantir rally to resume despite Burry's short bet, according to the charts

Palantir (PLTR) reported robust Q3 earnings, surpassing expectations with 110% adjusted EPS growth and a 51.4% EBITDA margin, driven by a 121% surge in US commercial revenue that reinforces its enterprise AI software narrative. The company raised its full-year guidance and achieved a strong "Rule of 40" score of 114, signaling significant profitability and growth potential. Despite these strong fundamentals, the stock experienced volatility and a post-earnings dip following short-seller Michael Burry's disclosure of a short position and warnings about an AI bubble, though the article notes deep liquidity and attracting institutional interest.

Analysis

Palantir (PLTR) reported a stellar Q3, with adjusted EPS growing 110% year-over-year to 21 cents, significantly beating street expectations of 17 cents. EBITDA margins expanded to 51.4%, surpassing forecasts of 45.8%, while total revenue increased 63% year-over-year to $1.18 billion. Crucially, U.S. commercial sales surged 121% year-over-year to $397 million, exceeding expectations and reinforcing the narrative of PLTR's transition to an enterprise AI software company.

The company demonstrated exceptional profitability metrics, achieving a "Rule of 40" score of 114, far exceeding SaaS peers like Snowflake (47%) and Datadog (56.7%). This metric, derived from a 63% revenue growth rate and 51% operating margin, signals a strong shift towards profit generation. Consequently, Palantir raised its full-year 2025 guidance to $4.396-$4.40 billion in total revenue, with U.S. commercial revenue expected to top $1.433 billion, supported by a massive contract backlog.

Despite robust fundamentals and a strongly positive sentiment (0.9), PLTR experienced significant post-earnings volatility, dropping below $170 following Michael Burry's short position disclosure and AI bubble warnings. The stock has since recovered to the $190 level, gapping up on above-average volume, finding support near its weekly uptrend line and 20-week moving average. This rebound, coupled with deep liquidity and institutional interest, suggests resilience against short-term pressures.

Key Decisions for Investors

• Investors should closely monitor Palantir's U.S. commercial revenue growth, as its 121% year-over-year surge is crucial for validating the company's enterprise AI transition and future revenue stability.
• The exceptional 'Rule of 40' score of 114 indicates strong operational efficiency and profit generation potential, warranting continued evaluation of margin expansion and growth rates against SaaS peers.
• Given recent volatility, investors should watch for a sustained technical breakout above the $200 level, which could signal increased institutional confidence and further upside momentum.
• While fundamentals are robust, be prepared for potential short-term price dislocations due to prominent short-seller activity, and assess whether such bearish sentiment is fundamentally justified or temporary market noise.