Michael Burry Says Palantir Is Worth $46. The Stock Trades at $130. Who’s Right?

Omor Ibne EhsanWed, February 25, 2026 at 2:27 PM UTC

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Atichat Wattanasin Stone / Shutterstock.com (Atichat Wattanasin Stone / Shutterstock.com)Quick Read -

Michael Burry reported $912M in puts against Palantir (PLTR) and liquidated Scion Asset Management like in 2008.

Burry’s analysis values Palantir at $46 compared to its current $130 price by treating it as consulting not SaaS.

Palantir trades at 98x forward earnings versus 19x for average software stocks and 30-40x for hypergrowth stocks.

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Palantir (NASDAQ:PLTR) was defying gravity for nearly three years, and it looked like a company that could genuinely violate the norm. However, PLTR stock looks more vulnerable today than it ever did in the past. The reality is that investors have grown pickier over time, and AI is no longer a novelty to them. A company like OpenAI, now struggling to raise money, makes it clear that investors are starting to decipher AI and understand both the constraints and the long payback period.

One investor in particular has been the complete opposite of your average bullish investor, and it's Michael Burry. He's famous for the "Big Short" during the Great Recession and has been trying to recreate that success ever since. Is Burry a one-trick pony? Well, we're about to know soon.

He has periodically shorted the market, but what he did last year is the closest to what he did before the Great Recession. Burry reported $912 million in puts on Palantir and $186.6 million in puts on Nvidia (NASDAQ:NVDA), and that was basically it. He got rid of his diversified holdings and consolidated them into a single big bet against AI. Most dramatically, he liquidated Scion Asset Management, just like he did in 2008.

So far in 2026, these puts are going in his favor.

Burry's thoughts on PLTR stock: $46... really!?

PLTR stock trades just shy of $130 as of this writing, and $46 is a massive discount from that quote. If PLTR stock dropped below $100 today, investors will be head over heels trying to buy that dip. A drop to $46 means a monumental crash, and a lot needs to go wrong.

Burry did a fundamental teardown of Palantir's business instead of plucking that number from thin air. He wrote a detailed multi-part analysis on his $379 Substack, where he argued Palantir's fair value lies as low as $21, or as high as $146. The $46 fair value comes from one of these scenarios, and is one that is neither too egregiously low nor high enough to go against his own short thesis. But again, one could argue that the upper end of that estimate means Burry isn't fully confident in his own short thesis.

Anyhow...

In a follow-up post titled "Palantir: An Accounting," he detailed aggressive revenue recognition, sales concessions, or other "nefarious tricks" rather than a clean subscription model. That post is not, by itself, the $46 spreadsheet, but it is part of the evidentiary stack he is using to justify treating Palantir's economics as less "pure SaaS" than the market narrative.

What this means is, Burry sees PLTR stock declining not because he sees the business collapsing, but because he believes there's going to be a recalibration in how the market sees this company.

PLTR stock trades at 98 times forward earnings today. That's textbook hypergrowth software valuation, and then some. The average software stock today trades at 19 times forward earnings. Even hypergrowth stocks trade at 30 to 40 times forward earnings. Regardless, for a multi-billion-dollar company, you only see valuations like that in software.

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If not SaaS, then what?

The nucleus of Burry's argument is that Palantir will stop trading like a software-as-a-service stock. However, the issue with that is, if the market does not look at Palantir as a SaaS company, then what?

A defense contractor?

Per Burry, the market has Palantir filed in the wrong drawer. Wall Street treats it like a recurring-revenue software platform, slaps on a SaaS multiple, and arrives at a number north of $100. Burry's retort is a look at how the money actually moves through this business, and it looks a lot more like a consulting firm with a software wrapper.

Palantir has long relied on what it calls "forward-deployed engineers," essentially on-site technical staff who embed with clients and customize Palantir's platforms for each use case. In a true SaaS model, you ship the product and the customer runs it. Palantir ships engineers along with the product. Burry argues that the costs of these engineers are split "atypically" across R&D and sales & marketing line items, rather than sitting in cost of revenue where they'd eat into gross margin. If you reclassify those costs where he thinks they belong, Palantir's reported 82% gross margin, which is very much a SaaS-grade number, starts looking a lot thinner, more like a services business.

So, who's right? Burry, or the market?

The market will give you the answer in due time.

In my opinion, though, Burry's arguments are more semantic than analytical, and probably one of the weakest serious bear cases I've seen. He's trying to convince the audience that Palantir belongs in the "consulting" drawer rather than the "software" drawer, thereby applying a consulting multiple. If you accept the reclassification, $46 follows naturally. If you don't, it doesn't.

The market right now does not see it that way, and PLTR stock trades at a SaaS multiple. I do believe $46 is possible, but only if we get a broad-based software drawdown, or a diabolical disappointment in a future quarterly report from Palantir.

This is a growing business, so time is not with Burry, but I do believe a move towards $80 is possible this year. $46 is certainly stretching it.

You should take a look at how Tesla (NASDAQ:TSLA) investors think. This is an electric vehicle business in nearly every way, but the bulls have convinced themselves this is an AI/robotics play where the EVs don't matter. Expecting TSLA stock to ever trade like a normal automaker is not realistic. Similarly, PLTR stock is very unlikely to trade like a consulting firm, even if the operations are similar to one.

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Source: “AOL Money”