Michael Burry's bearish call on Palantir Technologies is working. The software company's shares have dropped roughly 30.5% since the start of 2026, sliding from $177 to $123 by early August. A thousand-dollar bet placed on January 1st would now sit at about $695, handing Burry a clear win on his put options and direct short positions built through late 2025.

The famed investor who called the 2008 collapse never wavered on this thesis despite Palantir's genuine business momentum. His regulatory filings showed $912 million in notional exposure across five million shares before his fund deregistered. He's kept updating the market on his continued short exposure, hammering the same valuation argument repeatedly.

The Valuation Math Doesn't Add Up

Burry's core complaint sounds simple but cuts deep. Palantir trades at roughly 40 to 50 times forward sales, a multiple that leaves almost no margin for error. The company posted $1.63 billion in first-quarter revenue with 85% year-over-year growth, yet the stock price reflects something closer to fantasy than fundamentals. His concerns extend to the operating model itself, stock-based compensation diluting existing holders, and an AI narrative that's gotten ahead of reality.

The disconnect between growth and valuation is real enough. Palantir's Gotham and Foundry platforms remain heavily used by government agencies and commercial enterprises. The Artificial Intelligence Platform is genuinely a growth driver. But that business momentum doesn't require a 45-multiple valuation. Wall Street skeptics also note the company's dependence on government contracts, rising competition in AI software, and the perpetual shareholder dilution from equity compensation.

Broader equity markets stayed relatively stable in 2026, yet PLTR kept sliding. That divergence tells you something about the specific bets against the company, not just macro weakness. Burry wagered that valuations would compress, that AI enthusiasm would fade, and that investors would eventually care about actual unit economics rather than growth rates alone. So far, the market is proving him right on the timing if not yet the full magnitude.

This article is informational only and does not constitute financial advice. Short positions and options carry substantial risk, including potential losses exceeding initial investment. Consult a qualified financial advisor before making investment decisions.