- Palantir shares plunged 25% from November highs amid market turmoil and heavy bearish activity.
- Michael Burry filed massive put-option bets—66% of his $1.4B portfolio—sparking investor panic and valuation doubts.
- CEO Alex Karp accused short sellers of market manipulation, defending Palantir’s AI-driven growth and product superiority.
In the high-stakes world of AI stocks, few names have captured the imagination quite like Palantir Technologies.
The company, once a shadowy darling of the U.S. intelligence community, has morphed into a powerhouse of data analytics that’s reshaping everything from counterterrorism to corporate decision-making.
But lately, the shine has dulled. Shares of Palantir (NASDAQ: PLTR) have tumbled a stunning 25% since touching a record high in early November, leaving investors scratching their heads and retail traders on social media buzzing with theories.
The FrankNez Media Daily Briefing newsletter provides all the news you need to start your day. Sign up here.
At the center of the storm? None other than hedge fund legend Michael Burry and a fiery rebuttal from Palantir’s outspoken CEO, Alex Karp.
To understand the chaos, it’s worth rewinding a bit on Palantir’s improbable ascent.
How Palantir Become a Force to Be Reckoned With
Founded in the shadow of 9/11, the company cut its teeth building tools for government agencies.
Its flagship Gotham platform became a linchpin in counterterrorism efforts, sifting through mountains of data to connect the dots that others missed.
Fast-forward to today, and Palantir has pivoted hard toward the private sector.
The Foundry platform, its crown jewel for commercial clients, is now arming industries like finance, healthcare, manufacturing, and retail with AI-driven insights that turn raw data into actionable strategies.
It’s no wonder the stock has rocketed an eye-popping 1,800% since Palantir unveiled its AI platform back in April 2023.
The company hasn’t just met Wall Street’s expectations—it’s demolished them, quarter after quarter, fueling a frenzy among retail investors who see it as the ultimate AI play.
Yet, for all that momentum, cracks have started to show. The trigger for the recent sell-off?
A bombshell filing from Michael Burry, the contrarian investor immortalized in Michael Lewis’s The Big Short for calling the housing bubble before the 2008 crash.
Details of the Short-Play in Palantir
In a Form 13F disclosure dropped just a day before the market felt the heat, Burry revealed a massive bearish bet on Palantir.
We’re talking put options that make up a whopping 66% of his $1.4 billion portfolio—a move that’s as bold as it is eyebrow-raising.
His wager sent ripples through the market, amplifying doubts about whether Palantir’s blistering growth can justify its sky-high valuation.
Enter Alex Karp, Palantir’s enigmatic co-founder and CEO, who’s built a reputation for unfiltered candor that rivals even Burry’s.
Earlier this month, Karp stormed onto CNBC’s Squawk Box to fire back at the short sellers circling his company like vultures.
“Honestly, I think what is going on here is market manipulation,” he declared, his voice laced with disbelief.
He didn’t stop there, dismissing Burry’s position as “bat s*** crazy” and questioning why anyone would dare “attack what is clearly the most important software company in America.”
Karp, ever the defender, reminded viewers that Palantir has a history of torching short sellers who bet against it.
“I’m sorry short sellers can’t tell the difference between products that work and products that don’t,” he added, underscoring his conviction that the company’s tech is light-years ahead of the doubters.
Karp’s outburst was more than just CEO bravado—it’s a window into the tensions brewing beneath Palantir’s success story.
On one hand, the company’s third-quarter results were nothing short of stellar, with revenue surging and AI adoption accelerating across its government and commercial segments.
Clients are lining up for Gotham and Foundry, drawn by Palantir’s ability to deliver real-world results in an era where AI hype often outpaces substance.
But on the other, skeptics like Burry aren’t buying the narrative.
What Happens Now?
Palantir’s valuation remains lofty, trading at a price-to-sales multiple that dwarfs its tech peers.
Even if the stock cratered another 66% from here, it would still command the highest multiple in the S&P 500—a red flag for value hounds who argue the emperor might have no clothes.
So, where does that leave everyday investors? The 25% drop has turned what was once a momentum darling into a potential value trap—or, depending on your view, a screaming buy.
Retail forums are alight with debates: Is Burry a genius presciently calling the top on AI euphoria, or is he underestimating Palantir’s moat in a world increasingly hungry for data mastery?
Karp’s manipulation claims add fuel to the fire, hinting at shadowy forces at play in a market where meme stocks and billionaire bets can swing fortunes overnight.
As Palantir navigates this turbulence, one thing’s clear: The company’s story is far from over.
With AI’s transformative potential still unfolding, and Palantir at the vanguard, this dip could be the setup for the next leg up—or a cautionary tale of overreach.
For now, it’s a reminder that in the stock market, as in The Big Short, the real winners are often the ones who see the full picture amid the noise.
Also Read: Short Sellers Are Now Throwing One Another Under the Bus
