America’s biggest investor Michael Burry has renewed his criticism of Palantir Technologies, wanting that the valuation of the company could collapse below $100 billion. Despite Palantir’s AI-fueled rally that has lifted its market capitalisation to $407.2 billion, Burry argued the company resembles a consulting firm more than a true software business. “Palantir is back in the stratosphere. The facts have not changed,” he said in a post on X. Palantir shares slid 6% last week to close at $169.46, marking their worst session in over a week and tracking their weakest week in two months.
Michael Burry feels that Palantir is riding a bubble of AI demand
Burry described Palantir as “a consultant riding a bubble of AI FOMO demand.” He warned that even if the corporate scramble for AI lasts several more years, the eventual fall could be “epic, or more so.” His comments follow Palantir’s blockbuster Q2 results, which showed revenue surging 93% year-over-year to $1.94 billion and a raised 2026 outlook of $8.15 billion. Burry’s case centers on Palantir’s rising accounts receivable, which climbed to $1.49 billion as of June 30 from $1.04 billion at the end of 2025. He noted that one customer represented 27% of receivables despite no single client contributing more than 10% of revenue. He warned this concentration gives the customer significant leverage, raising risks of delayed payments or channel stuffing.
Questioning the software label
Burry further argued that Palantir's deferred-revenue patterns look more like those of a consulting firm such as Accenture than a subscription software company like Salesforce or ServiceNow. He pointed to Palantir's deferred-revenue-to-revenue ratio of about 32% — close to Accenture's 31%, but far below the 80%-to-207% range he calculated for true SaaS peers — as evidence that the company isn't the software business its narrative suggests. He also cited an unverified private conversation among former Palantir employees describing the company's real "moat" as its willingness to staff clients with people working extremely long hours rather than software alone, with one participant reportedly dismissing its AIP branding as opportunistic.
Stock compensation and tax benefits
Burry also took aim at Palantir's use of stock-based compensation and tax planning. The company reported about $1.6 billion in pretax GAAP income for 2025 but paid no federal cash taxes, thanks to net operating loss carryforwards that grew to $9 billion from $5.5 billion — an increase Burry attributed largely to deductions tied to stock compensation. He argued shareholders are effectively funding employee pay through dilution while the federal government subsidizes the company through substantial tax shields. He also flagged Palantir's decision to cancel a $1 billion buyback authorization after repurchasing only about $75 million worth of shares in 2025, alongside CEO Alex Karp's sale of roughly 492,000 shares worth $86 million last month.
Alex Karp's private jet spending
Burry also criticized disclosures showing Palantir spent $17.2 million on expenses tied to CEO Alex Karp's personally owned aircraft in 2025, more than double the $7.7 million spent the year before. He called the spending excessive, and a Jefferies analyst estimated the sum could correspond to somewhere between roughly 1,150 and 2,450 flight hours, depending on the aircraft's operating costs.
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