Burry's Bearish Prediction on Palantir
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
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Should l Buy PLTR?
Source: Fool
- Burry's Price Drop Prediction: Renowned investor Michael Burry predicts Palantir's fair value at $46 per share, suggesting a 65% decline from current levels, which may undermine investor confidence in the stock's future performance.
- Historical Performance Concerns: Burry highlights Palantir's unprofitability over much of the past two decades, noting that many sales were one-off transactions that failed to generate recurring revenue, raising doubts about the company's long-term profitability.
- Strong Current Financials: Despite Burry's concerns, Palantir's recent earnings report reveals a fourth-quarter revenue of $1.4 billion, a 70% year-over-year increase, marking the 10th consecutive quarter of revenue growth, indicating robust demand for its AI platform.
- Divergent Analyst Opinions: While Burry's assessment has garnered attention, analysts at D.A. Davidson reaffirmed a neutral rating and a $180 price target for Palantir, arguing that Burry's arguments lack new evidence, reflecting ongoing market confidence in the company.
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Analyst Views on PLTR
Wall Street analysts forecast PLTR stock price to rise
17 Analyst Rating
5 Buy
10 Hold
2 Sell
Hold
Current: 134.890
Low
50.00
Averages
192.88
High
255.00
Current: 134.890
Low
50.00
Averages
192.88
High
255.00
About PLTR
Palantir Technologies Inc. is engaged in building software to assist in counterterrorism investigations and operations. The Company has built four principal software platforms, including Palantir Gotham (Gotham), Palantir Foundry (Foundry), Palantir Apollo (Apollo), and Palantir Artificial Intelligence Platform (AIP). Apollo is a cloud-agnostic, single control layer that coordinates ongoing delivery of new features, security updates, and platform configurations, helping to ensure the continuous operation of critical systems. Gotham enables users to identify patterns hidden deep within datasets, ranging from signals intelligence sources to reports from confidential informants. Foundry transforms the ways organizations operate by creating a central operating system for their data. AIP enables responsible artificial intelligence (AI)-advantage across the enterprise by using primary, core components built to effectively activate large language models and other AI within any organization.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Burry Predicts Palantir Stock Could Plunge 65%
- Burry's Bearish Prediction: Renowned investor Michael Burry suggests in a 10,000-word manifesto that Palantir's stock could drop to $46 per share, representing a 65% decline from current levels, despite the company's recent strong performance indicating its potential in the AI sector.
- Earnings Counter Bear Thesis: Palantir's latest earnings report reveals fourth-quarter revenue of $1.4 billion, a 70% year-over-year increase, marking the tenth consecutive quarter of revenue growth, demonstrating the company's competitive edge and improving profitability in the market.
- Government and Commercial Growth: Revenue from Palantir's U.S. government segment surged 66% year-over-year to $570 million, while the commercial segment skyrocketed 137% to $507 million, reflecting unprecedented demand for its AI platform and driving 180 deals worth over $1 million each.
- Record Contract Value: Palantir's total contract value reached $4.26 billion, up 138%, with remaining performance obligations soaring 143% to $4.21 billion, indicating significant future revenue potential, even as its P/E ratio stands at 214 times earnings, yet still garners Wall Street's favor.
See More
Palantir Secures $1 Billion Deal with DHS
- Major Contract Signing: Palantir has secured a groundbreaking five-year, $1 billion software purchase agreement with the Department of Homeland Security, aimed at providing commercial software licenses, maintenance, and implementation services, significantly enhancing its position in the government market.
- Procurement Process Streamlined: This agreement allows DHS and its agencies, including Customs and Border Protection and Immigration and Customs Enforcement, to bypass the normal competitive bidding process for purchases up to $1 billion, greatly improving procurement efficiency.
- Significant Financial Impact: With Palantir generating $1.4 billion in revenue during Q4, the signing of this agreement is expected to further drive revenue growth, especially as the company's remaining performance obligation surged from $2.6 billion to $4.2 billion.
- Expansion Potential: CTO Akash Jain indicated that this agreement could open doors for further collaborations with additional U.S. government agencies such as the U.S. Secret Service and FEMA, showcasing the company's long-term strategic positioning in government contracts.
See More
Israel Englander Reduces Nvidia Stake, Doubles Palantir Investment
- Nvidia Stake Reduction: Israel Englander sold 3 million shares of Nvidia in Q4, trimming his position by 17%, despite the company's dominance in AI infrastructure and a projected 38% annual earnings growth over the next three years, indicating an attractive valuation despite high costs.
- Palantir Stake Increase: Englander bought 543,300 shares of Palantir, doubling his stake, even though the company remains the most expensive stock in the S&P 500 with a P/E ratio of 212, reflecting his confidence in a potential rebound.
- AI Market Outlook: Nvidia's CUDA platform provides unique AI application development tools, enhancing its competitive edge, while Palantir is recognized as a leader in AI decisioning platforms, underscoring both companies' significant roles in the rapidly evolving AI market.
- Caution for Investors: While Englander's trades offer insights, investors should reassess the market conditions of both stocks before making similar trades, particularly in light of the rapid growth in AI spending.
See More
Israel Englander Reduces Nvidia Stake, Doubles Palantir Position
- Englander Sells Nvidia: Israel Englander trimmed his Nvidia stake by 3 million shares, a 17% reduction, in Q4, indicating a potential strategy to take profits or diversify despite Nvidia's strong position in AI infrastructure.
- Palantir's Exceptional Performance: Palantir has achieved accelerating sales growth for 10 consecutive quarters, with a remarkable Rule of 40 score of 127% in Q4, highlighting its robust fundamentals in data integration and analytics, even as its stock remains expensive.
- Optimistic Future for Nvidia: Wall Street expects Nvidia's earnings to grow by 38% annually over the next three years, with a current P/E ratio of 47, suggesting that the market may be underestimating AI spending, which could lead to even faster earnings growth.
- Palantir's Market Positioning: Despite a 35% drop from its peak, Palantir's price-to-sales ratio remains at 72, significantly higher than other S&P 500 companies, underscoring its leadership in enterprise AI standards, although Englander's position is relatively small, not ranking among his top 50 holdings.
See More
Burry's Bearish Prediction on Palantir
- Burry's Price Drop Prediction: Renowned investor Michael Burry predicts Palantir's fair value at $46 per share, suggesting a 65% decline from current levels, which may undermine investor confidence in the stock's future performance.
- Historical Performance Concerns: Burry highlights Palantir's unprofitability over much of the past two decades, noting that many sales were one-off transactions that failed to generate recurring revenue, raising doubts about the company's long-term profitability.
- Strong Current Financials: Despite Burry's concerns, Palantir's recent earnings report reveals a fourth-quarter revenue of $1.4 billion, a 70% year-over-year increase, marking the 10th consecutive quarter of revenue growth, indicating robust demand for its AI platform.
- Divergent Analyst Opinions: While Burry's assessment has garnered attention, analysts at D.A. Davidson reaffirmed a neutral rating and a $180 price target for Palantir, arguing that Burry's arguments lack new evidence, reflecting ongoing market confidence in the company.
See More
Michael Burry's Dire Prediction on Palantir Stock
- Burry's Bearish Stance: Renowned investor Michael Burry issued a dire prediction in a 10,000-word manifesto, suggesting Palantir's fair value is $46 per share, indicating a 65% downside from current levels, which reflects his strong concerns about the company's future performance.
- Historical Profitability Issues: Burry highlighted that Palantir has been unprofitable for much of the past two decades, with many sales being one-off transactions that fail to generate recurring revenue, revealing vulnerabilities in its business model.
- Strong Financial Performance: Despite Burry's skepticism, Palantir's recent earnings report showed fourth-quarter revenue of $1.4 billion, a 70% year-over-year increase, marking the tenth consecutive quarter of revenue growth, indicating robust performance amid surging demand for its AI platform.
- Analyst Sentiment Shift: Among 27 analysts, 13 have upgraded their ratings to buy or strong buy, up from just six last month, reflecting a growing recognition of Palantir's growth potential in the market, despite its high valuation of 214 times earnings.
See More
Burry Predicts Palantir Stock Could Plunge 65%
- Burry's Bearish Prediction: Renowned investor Michael Burry suggests in a 10,000-word manifesto that Palantir's stock could drop to $46 per share, representing a 65% decline from current levels, despite the company's recent strong performance indicating its potential in the AI sector.
- Earnings Counter Bear Thesis: Palantir's latest earnings report reveals fourth-quarter revenue of $1.4 billion, a 70% year-over-year increase, marking the tenth consecutive quarter of revenue growth, demonstrating the company's competitive edge and improving profitability in the market.
- Government and Commercial Growth: Revenue from Palantir's U.S. government segment surged 66% year-over-year to $570 million, while the commercial segment skyrocketed 137% to $507 million, reflecting unprecedented demand for its AI platform and driving 180 deals worth over $1 million each.
- Record Contract Value: Palantir's total contract value reached $4.26 billion, up 138%, with remaining performance obligations soaring 143% to $4.21 billion, indicating significant future revenue potential, even as its P/E ratio stands at 214 times earnings, yet still garners Wall Street's favor.
See More
Palantir Secures $1 Billion Deal with DHS
- Major Contract Signing: Palantir has secured a groundbreaking five-year, $1 billion software purchase agreement with the Department of Homeland Security, aimed at providing commercial software licenses, maintenance, and implementation services, significantly enhancing its position in the government market.
- Procurement Process Streamlined: This agreement allows DHS and its agencies, including Customs and Border Protection and Immigration and Customs Enforcement, to bypass the normal competitive bidding process for purchases up to $1 billion, greatly improving procurement efficiency.
- Significant Financial Impact: With Palantir generating $1.4 billion in revenue during Q4, the signing of this agreement is expected to further drive revenue growth, especially as the company's remaining performance obligation surged from $2.6 billion to $4.2 billion.
- Expansion Potential: CTO Akash Jain indicated that this agreement could open doors for further collaborations with additional U.S. government agencies such as the U.S. Secret Service and FEMA, showcasing the company's long-term strategic positioning in government contracts.
See More
Israel Englander Reduces Nvidia Stake, Doubles Palantir Investment
- Nvidia Stake Reduction: Israel Englander sold 3 million shares of Nvidia in Q4, trimming his position by 17%, despite the company's dominance in AI infrastructure and a projected 38% annual earnings growth over the next three years, indicating an attractive valuation despite high costs.
- Palantir Stake Increase: Englander bought 543,300 shares of Palantir, doubling his stake, even though the company remains the most expensive stock in the S&P 500 with a P/E ratio of 212, reflecting his confidence in a potential rebound.
- AI Market Outlook: Nvidia's CUDA platform provides unique AI application development tools, enhancing its competitive edge, while Palantir is recognized as a leader in AI decisioning platforms, underscoring both companies' significant roles in the rapidly evolving AI market.
- Caution for Investors: While Englander's trades offer insights, investors should reassess the market conditions of both stocks before making similar trades, particularly in light of the rapid growth in AI spending.
See More
Israel Englander Reduces Nvidia Stake, Doubles Palantir Position
- Englander Sells Nvidia: Israel Englander trimmed his Nvidia stake by 3 million shares, a 17% reduction, in Q4, indicating a potential strategy to take profits or diversify despite Nvidia's strong position in AI infrastructure.
- Palantir's Exceptional Performance: Palantir has achieved accelerating sales growth for 10 consecutive quarters, with a remarkable Rule of 40 score of 127% in Q4, highlighting its robust fundamentals in data integration and analytics, even as its stock remains expensive.
- Optimistic Future for Nvidia: Wall Street expects Nvidia's earnings to grow by 38% annually over the next three years, with a current P/E ratio of 47, suggesting that the market may be underestimating AI spending, which could lead to even faster earnings growth.
- Palantir's Market Positioning: Despite a 35% drop from its peak, Palantir's price-to-sales ratio remains at 72, significantly higher than other S&P 500 companies, underscoring its leadership in enterprise AI standards, although Englander's position is relatively small, not ranking among his top 50 holdings.
See More
Burry's Bearish Prediction on Palantir
- Burry's Price Drop Prediction: Renowned investor Michael Burry predicts Palantir's fair value at $46 per share, suggesting a 65% decline from current levels, which may undermine investor confidence in the stock's future performance.
- Historical Performance Concerns: Burry highlights Palantir's unprofitability over much of the past two decades, noting that many sales were one-off transactions that failed to generate recurring revenue, raising doubts about the company's long-term profitability.
- Strong Current Financials: Despite Burry's concerns, Palantir's recent earnings report reveals a fourth-quarter revenue of $1.4 billion, a 70% year-over-year increase, marking the 10th consecutive quarter of revenue growth, indicating robust demand for its AI platform.
- Divergent Analyst Opinions: While Burry's assessment has garnered attention, analysts at D.A. Davidson reaffirmed a neutral rating and a $180 price target for Palantir, arguing that Burry's arguments lack new evidence, reflecting ongoing market confidence in the company.
See More
Michael Burry's Dire Prediction on Palantir Stock
- Burry's Bearish Stance: Renowned investor Michael Burry issued a dire prediction in a 10,000-word manifesto, suggesting Palantir's fair value is $46 per share, indicating a 65% downside from current levels, which reflects his strong concerns about the company's future performance.
- Historical Profitability Issues: Burry highlighted that Palantir has been unprofitable for much of the past two decades, with many sales being one-off transactions that fail to generate recurring revenue, revealing vulnerabilities in its business model.
- Strong Financial Performance: Despite Burry's skepticism, Palantir's recent earnings report showed fourth-quarter revenue of $1.4 billion, a 70% year-over-year increase, marking the tenth consecutive quarter of revenue growth, indicating robust performance amid surging demand for its AI platform.
- Analyst Sentiment Shift: Among 27 analysts, 13 have upgraded their ratings to buy or strong buy, up from just six last month, reflecting a growing recognition of Palantir's growth potential in the market, despite its high valuation of 214 times earnings.
See More
