ByMichael Burry takes a $1B short position against Palantir even as the AI company posts 60% revenue growth and record free cash flow.
Michael Burry Bets $1 Billion Against Palantir as Stock Hits Record Valuation — Despite 60% Revenue Growth
By MTNGOV.com Finance Desk | November 2025
Article:
Famed “Big Short” investor Dr. Michael Burry has taken a massive bearish position against Palantir Technologies (NYSE: PLTR), one of the hottest AI stocks on Wall Street.
According to Scion Asset Management’s latest 13F filing for Q3 2025, Burry holds put contracts covering around 5 million Palantir shares, representing roughly $1 billion in notional value.
The move comes even as Palantir reported blockbuster third-quarter results, raising questions about whether the AI-driven rally has gone too far, too fast.
Burry’s Portfolio Moves: Betting Against AI Hype?
Alongside his Palantir short, Burry has built a $200 million position in Nvidia (NASDAQ: NVDA) — another major AI player — and added long positions in Lululemon (LULU), Molina Healthcare (MOH), and Halliburton (HAL), possibly signaling a rotation into energy and healthcare.
Burry’s mixed strategy suggests he may believe AI leaders like Palantir have become overvalued, while traditional sectors could see a rebound.
Palantir’s Explosive Growth Story
Palantir’s Q3 2025 earnings showed 60% year-over-year revenue growth, up sharply from the mid-teens just two years ago.
CEO Alex Karp called the company’s ascent “unrelenting,” saying Palantir has defied analysts’ expectations while shaping “the current geopolitics of AI.”
Key Q3 highlights:
- U.S. Commercial Revenue: +120% YoY
- U.S. Government Revenue: +52% YoY
- Operating Margin: 33%
- Free Cash Flow: $500 million for the quarter (40%+ margin)
- Cash Reserves: $6 billion
- Debt: None
Major clients like BP, American Airlines, and HSS have praised Palantir’s AI platform for driving “triple-digit operational returns.”
The Valuation Problem
Despite these stellar results, Palantir’s stock has skyrocketed 2,400% over the past few years, now trading at an eye-popping 140x sales — one of the highest multiples in the global market.
Analytics platform Flash gives Palantir a perfect 10/10 score for growth and financial health, but warns that valuation is a concern, projecting a potential 40–80% downside over five years due to multiple contraction.
Even Jim Cramer recently raised his bullish price target to $250, though critics argue it’s based more on market momentum than fundamentals.
Why Michael Burry Is Shorting Palantir
Burry’s short appears to target Palantir’s valuation excess, not its business model. As he famously said:
“Sometimes the only winning move is not to play.”
Even assuming Palantir’s free cash flow grows 40% annually, it would reach $10 billion by 2030—still placing the stock at 50x free cash flow relative to its $500 billion valuation.
In other words, Palantir must grow faster than even bullish projections to justify its current price—a challenge even for an AI leader.
The Bottom Line
Michael Burry’s billion-dollar short is a bold bet that Palantir’s valuation bubble will burst, even as the company delivers some of the strongest financial results in tech.
For investors, the tension between fundamental excellence and extreme valuation may define Palantir’s next chapter — and test whether Burry’s “Big Short 2.0” plays out again.
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