Michael Burry says he's still betting against Palantir after Trump post boosts stock

Michael Burry reiterated his bearish Palantir stance, saying he still holds long-dated puts and is targeting a fundamental value well below $50 per share versus Friday's close of $128.06. He also added to Nvidia puts, highlighting continued negative positioning across major AI names. The news is likely to keep pressure on sentiment around the stocks, though Trump’s endorsement may cushion near-term trading.

Analysis

The key read-through is that the market is no longer debating whether these names are good businesses; it is debating whether “AI + defense + political adjacency” deserves a permanent scarcity premium. That premium is vulnerable because both PLTR and NVDA now sit in the same crowded trade: long-duration growth funded by narrative momentum, with high implied expectations and very little room for multiple compression if rates stay sticky or the AI capex cycle decelerates. Burry’s use of dated puts matters less as a signal on direction than as a timing marker: he is explicitly targeting a window where the stocks can still rally, but where theta and IV can be monetized if the post-earnings or post-headline reflex fades.

PLTR has the worse risk/reward in the near term because its valuation is more dependent on sustained multiple expansion than on incremental earnings power. Defense and government demand may cushion fundamentals, but that also creates a second-order constraint: contract wins are lumpy, slower to re-rate, and often already anticipated by the market, while any disappointment in commercial ARR or margin trajectory can trigger a fast de-rating toward software peers. If the stock is being supported by geopolitical headlines, that support is inherently unstable and likely to mean-revert once the tape rotates away from defense/AI sentiment.

NVDA is structurally stronger but still exposed to the consensus blind spot: implied demand may be running ahead of actual deployment economics. The risk is not a collapse in absolute demand; it is a sequence of slower order growth, customer digestion, and tighter scrutiny of ROI on AI infrastructure spend, which can compress the multiple even if revenue remains elevated. In that setup, the winners are less obvious: low-beta infrastructure suppliers with contracted cash flows and select software names with real monetization may outperform while the highest-duration AI leaders de-rate.

The contrarian view is that both puts can be right on fundamentals and wrong on timing. These names can squeeze hard on any fresh policy, defense, or capex headline, especially while positioning is crowded and borrow is expensive. That makes the better expression a defined-risk put structure or a relative-value short against lower-quality AI/software names rather than outright shorting into a headline-driven tape.

Key Decisions for Investors

• Maintain or initiate a defined-risk bearish structure in PLTR: buy 3-6 month puts or put spreads rather than short stock; target downside toward the prior valuation support zone over 2-4 months, with a stop if momentum reasserts on fresh defense headlines.
• Fade NVDA strength via put spreads on any post-rally squeeze: prefer 1-3 month tenor around earnings/major AI event windows, because implied volatility is elevated and downside can be harvested without unlimited theta bleed.
• Pair trade: short PLTR / long a lower-multiple defense contractor or infrastructure beneficiary over 1-2 quarters to isolate valuation compression from sector beta; thesis works if political sentiment stays noisy but procurement remains gradual.
• Use a tight risk budget on outright shorts: cover 25-50% on any 8-10% gap-up day in PLTR/NVDA, as headline-driven squeezes can overwhelm fundamentals for several sessions.
• If AI capex data begins to soften, rotate from high-duration AI beta into cash-generative infrastructure names over the next 1-2 earnings cycles; the market is likely to punish narrative-heavy names first.