Michael Burry’s Palantir short is still looking right, as PLTR stays flat-to-lower over the past year

For investors watching software stocks tied to the artificial intelligence (AI) narrative, Palantir Technologies has become a recurring example. Reporting this week, market commentators pointed to Palantir’s share performance over roughly the past year and tied it to a valuation-driven short thesis associated with Michael Burry, whose stance resurfaced in late 2025 and again in 2026.

According to the reporting, Burry began betting against Palantir in the fall of 2025, when the stock was characterized as a high-visibility momentum trade among retail investors. By mid-2026, the stock was described as down about 5% over the trailing 12 months and down about 21% year-to-date, with the share price referenced around $132 at the time of the article.

The core argument described in the market coverage is less about Palantir’s reported business growth and more about how quickly investors may be willing to pay for it. The article said Palantir has shown revenue growth of about 85% year over year, but argued the market has responded with “multiple compression,” meaning a lower valuation multiple relative to earnings as enthusiasm for AI stories cools.

The same coverage also cited valuation and expectations. It referenced a forward price-to-earnings measure near 145 and said analyst consensus pointed to a much higher figure for the stock, framing the current price as reflecting “priced-for-perfection” expectations and limited room for growth deceleration.

Burry’s short, as characterized in the reporting, was described as being aimed at that valuation risk. The article also highlighted signs of sentiment and positioning, including a described shift in retail mood around Palantir, and said insider selling across dozens of recent transactions added to the cautious tone. The write-up further suggested that while Burry has not been “fully vindicated,” a stock that holds near its lows for a full year while fundamentals rise can still be consistent with a “valuation must fall before sentiment returns” outcome.

One reason Palantir keeps drawing crosscurrents of bullish and bearish commentary is that it sits at the intersection of two market themes that can move in opposite directions: defense and government contracting on one hand, and AI-software expectations on the other. In practice, investor narratives about Palantir can swing quickly based on perceptions of whether its platforms translate into sustained margins, scalable commercial demand, or new contract wins.

Still, major pieces of the dispute remain difficult to settle purely from stock performance. The market story does not provide new earnings, contract totals, or disclosures from Palantir itself in the text provided for this round of reporting. It also does not detail the specific terms of Burry-related positions, such as whether the bet was a hedge, the size of any exposure, or whether it was adjusted over time.

What to watch next is whether Palantir can turn high growth into a valuation re-rate rather than continued multiple compression. In the near term, investors will likely focus on what management reports about profitability trends, guidance for the next quarters, and any evidence that demand for its software deployments, including AI-enabled applications, is broadening beyond the most optimistic expectations. Separately, market participants will keep tracking whether sentiment around PLTR stabilizes or re-accelerates as AI narratives evolve.