Burry vs. Karp
Palantir Technologies (PLTR)
Legendary bear Michael Burry fights spiky CEO Alex Karp over PLTR’s rich valuation — only one can win, or?
There’s an old saying; ‘in the land of the blind, the one-eyed man is king.’ Famed short-seller Dr. Michael Burry’s fixed his one good eye on software behemoth Palantir. Behind the comforts of a $439/year paywall, Burry’s rallying retail troops against controversial CEO Alex Karp, who once casually declared he’d love to spray ‘light fentanyl-laced urine’ on critics.
In essence, Burry argues PLTR’s biz model is broken and predicts more than 2/3 of its ~$300bn mkt cap will vanish asap zulu. The good doctor also crafts vivid renderings of ‘nefarious accounting practices’ and exorbitant ‘$17mn private jet expenses’ — but caveats hard evidence is difficult to come by due to PLTR’s secretive nature. A rather clever way of turning disclaimer into warning sign!
So what exactly does PLTR do? Rising from the ashes of the 9/11 data integration failure, it was masterminded by Peter Thiel applying PayPal’s anti-fraud algorithms to the war on terror. Despite the public lore, PLTR’s biz model is relatively simple — its software sits neatly on top of customers’ messy legacy systems and processes large sets of data to help find patterns. Indeed, the name is an explicit reference to Tolkien’s ‘palantíri,’ magical seeing stones that can be used to monitor any part of the world. 🔮
As of Q4’25, PLTR’s revenue splits ~50/50 between gov’t and commercial, having grown the latter ~1.4x YoY. Furthermore, mgmt bullishly guided ‘26 topline ~$7.2bn w/ operating margin >50%. To put that in perspective, PLTR eclipses peers along the ‘rule of 40’ parameters:
That’s a strong signal Karp got plenty pricing power and doesn’t need to burn cash to acquire customers (let’s not worry about the ‘non-cash’ cost of paying staff in stock, shall we.) Furthermore, PLTR has zero debt, ~$7bn B/S cash and a robust backlog incl. $10bn contract w/ the US army fueling operational escape velocity. In a world where everyone’s looking for a seamless solution to complex problems, PLTR remains one of few softwares names clearly benefitting from AI deployments. What’s not to like?
Well, as the sharp-pencilled Burry points out, PLTR 0.00%↑ is not exactly cheap. Although it’s come down ~30% since the Nov’25 ATH, based on ‘26 estimates the stock’s trading ~40x EV/sales and ~70x EV/EBIT — not quite Buffett territory.
The key question’s whether PLTR may continue to grow into its valuation (like it has in the past.) Positioning itself as a mission critical data analytics platform in an AI-driven world, the co’s been at the center of recent headlines, incl. DOGE, ICE, Venezuela, Gaza, Iran and Golden Dome. In the lingo of Nassim Taleb, PLTR’s ‘antifragile’ — the more crises, the more opportunities..
As your dedicated shrimp, I wouldn’t bet against Karp’s ambition to make PLTR the de-facto operating system for the US gov’t and major Western institutions alike, but I reckon a chunk of that upside’s currently priced in. Based on mgmt’s goal of $40bn rev by end of decade, we get to EV/sales ~7.5x and EV/EBIT in the mid-teens. That’s still not super cheap — and given all the moving parts between now and then, it leaves meaningful downside risk.
In conjunction, despite ultimately cheering for Karp, I’d welcome a few pyrrhic victories for Burry temporarily stymying the chart. During this erratic SaaS-pocalypse, where Mr Market appears quite unable to discern fact from fiction downstream of eloquent substackers like Burry and Citrini, you never know how far ‘AI-endangered’ names could drop. I’ll certainly be nibbling at PLTR sub-$100, and feasting ~$50/sh!
Before I swim off, it might be worth considering why Dr. Burry voluntarily entered the arena merely armed w/ a pen against the sword-wielding Karp. ✒️🗡️ When in doubt, it’s always helpful to turn to poor Charlie’s Mungerisms for clarity of thought; ‘show me the incentive, and I will show you the outcome.’ Not only did Burry make a directional bet against PLTR, in parallel he started a paid blog service which has mushroomed to ~230k subscribers.
Aha! So the timing for publicizing this maverick bet against one of the most valuable retail darlings is probably not a coincidence then. If we assume a meaningful % of Burry’s newly acquired subs are paid and multiply that by ~$400/year, we end up with a very large number. Thus even if his glass eye dims against the palantíri and his pen falls to Karp’s sword — odds are Burry’s already won seeing that (pun intended) his retail troops are paying for the privilege of blindly following their one-eyed king into battle.
That would explain why ‘Read it yourselves’ (ie ‘Upgrade to paid’) has quickly become Burry’s default response:
Comments and questions always welcome — below or X/Twitter
Shrimp out. 🍤
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