"Big Short" Investor Michael Burry Says Palantir Is Worth Less Than $50 a Share -- Here's Why He's Betting Against It in 2026

Michael Burry disclosed bearish Palantir puts, including June 17, 2027 $50 strikes and December 18, 2026 $100 strikes, implying he expects the stock to fall well below current levels. The article emphasizes Palantir’s rich valuation at nearly 100x this year’s projected EPS of $1.30 and over 50x estimated 2027 earnings, versus 21x for the S&P 500. While the piece notes analysts’ $191.29 average target, it frames the stock as highly contentious and potentially volatile.

Analysis

The setup is less about one investor’s bearish call and more about a crowded-duration shock to AI software multiples. PLTR sits in the zone where narrative premium is doing most of the work; if the market stops rewarding “category leader” at any price, the multiple can compress faster than fundamentals can disappoint. That creates a non-linear downside path: even modest estimate revisions or slower billings growth can trigger a de-rating toward software peers rather than a slow grind lower.

The second-order winner is not necessarily the obvious large-cap AI names, but the companies that can monetize the same enterprise spend with lower execution risk and broader install bases. MSFT and GOOGL are better insulated because AI is embedded into existing cash-generating franchises, so they can defend pricing while funding model spend from core margins. NVDA is the cleaner beneficiary if AI capex remains intact, because a valuation reset in app-layer software does not automatically translate into lower infrastructure demand; if anything, it can shift budget share down the stack toward picks-and-shovels.

The key catalyst window is weeks to months, not years: a further risk-off move in high-multiple software, any guidance that implies slower monetization, or a broader unwind in AI enthusiasm could force systematic selling. The main upside risk to a short is a fresh catalyst that re-accelerates sentiment and squeezes crowded bears, especially if government/defense headlines create an incremental demand narrative. But because options already express a defined bearish thesis, the trade is really a volatility and multiple-compression bet rather than a pure fundamentals short.

Consensus is likely missing how fragile the current valuation anchor is. The market is implicitly pricing sustained scarcity value in decision intelligence, yet this is a feature-rich software market with low barriers for the largest platforms to bundle competing functionality. If that competitive pressure becomes visible in procurement cycles, the rerating can happen before the earnings math fully reflects it.

Key Decisions for Investors

• Initiate a tactical short PLTR over the next 1-2 sessions on strength, with a 4-8 week horizon; target a 15-25% pullback if multiple compression broadens across high-beta AI software, and cut if the stock reclaims recent momentum highs on heavy volume.
• Preferred expression: buy PLTR put spreads 2-4 months out rather than naked puts; this captures downside from a de-rating while limiting theta decay if the stock chops sideways.
• Pair trade: long MSFT / short PLTR for a 1-3 month mean-reversion thesis; MSFT has AI exposure with lower valuation fragility, while PLTR carries the highest sentiment-to-fundamental mismatch.
• If looking for beta to AI spend without app-layer multiple risk, rotate incremental capital toward NVDA on a 3-6 month horizon; use PLTR weakness as a signal that investors are shifting preference from story stocks to infrastructure names.
• Take a risk-managed short only if broad AI sentiment deteriorates further; if PLTR falls on company-specific headlines but peers hold up, cover quickly because the move is likely idiosyncratic rather than the start of sector-wide multiple compression.