Palantir Technologies’ unstoppable stock rally finally hit a wall this week as the shares crashed, despite the company posting strong quarterly results. It is a sharp downturn coinciding with the announcement that American investor Michael Burry has taken a massive bearish position against the company.
The stock of the data analytics giant plummeted more than 8% in trading on Tuesday, November 4, closing at about $190.74. The sell-off was particularly sharp since it came hours after Palantir posted a stellar third-quarter earnings report on Monday afternoon.
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The company reported a revenue of $1.181 billion, representing a 63% Year-over-Year (YoY) surge driven by its high demand for its artificial intelligence Platform. US commercial revenue, representing one growth indicator, is skyrocketing 121% to $397 million. Palantir also increased full-year revenue guidance to approximately $4.4 billion, which expresses a deep confidence in its business.
Normally, such a report would send a stock soaring. But the good news was dominated by a regulatory filing from Michael Burry's Scion Asset Management. The 13F filing, which was made public on Monday for the quarter ending September 30, 2025, shows that Burry has placed a $912 million bet against Palantir through put options, as cited on the Reuters report.
This bearish position, which represents the bulk of Scion's portfolio, immediately justified the fears about Palantir's extreme valuation. Before the drop, shares of Palantir had risen more than 170% Year-to-Date (YTD), lifting its valuation to reach heights.
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As per Reuters, the company was trading at nearly 250 times its forward earnings estimates, a multiple that decreases the fame of other technology giants like Nvidia, which trades for 33 times and Microsoft, which trades for 30 times.
The mix of Burry's bet and the sky-high valuation seems to have created a priced for perfection scenario. Even the stunning results at Palantir were not good enough to impress investors or offset the warning from Wall Street's most prominent bears. The fall perhaps brings confusion among investors about Palantir being the future of AI or a prime example of a bubble about to burst.
