The stock market has never had trouble producing extreme opinions, particularly when investors are trying to put a value on companies at the center of a technological revolution. Artificial intelligence has made that problem even harder. Some investors see a once-in-a-generation transformation that will create enormous pools of profits. Others see a speculative cycle in which today’s growth rates eventually collide with tomorrow’s valuation reality.
Michael Burry has planted his flag firmly in the second camp. But his latest prediction for Palantir Technologies (NYSE:PLTR | PLTR Price Prediction) sounds almost like the punchline to a joke: He believes the leading AI software company’s long-run intrinsic value is below $1 per share.
Burry Really Does Think Palantir Is Worth $1
Let’s be clear: Burry isn’t merely warning that Palantir is expensive. The investor behind the famous “Big Short” recently re-established his bearish position, including buying March 2027 $100 put options, after previously covering part of his short. With shares closing at $175.23 on Aug. 10, Burry’s $1 prediction implies a potential decline of more than 99%.
Yet, Burry’s argument deserves attention. He pointed to Palantir trading at roughly 69 times sales, the tripling of its non-cancellable infrastructure purchase agreements during 2026, and what he considers a large accounting gap related to stock-based compensation. Those are legitimate risks for shareholders paying a premium valuation.
But then there’s the other side of the ledger.
Palantir’s Numbers Don’t Look Like a $1 Stock
Palantir’s second-quarter results make Burry’s long-term forecast particularly difficult to reconcile with the company’s current trajectory.
Palantir’s revenue jumped 93% year over year to $1.94 billion. U.S. commercial revenue increased 149% to $764 million, while U.S. government revenue climbed 90% to $809 million. Adjusted free cash flow reached $1.22 billion, producing a 63% margin.
Those aren’t the numbers associated with a business whose intrinsic value is headed toward zero. More importantly, the growth isn’t confined to one customer group. Palantir’s U.S. commercial remaining deal value rose 124% to $6.24 billion, while total contract value increased 49% to $3.37 billion. The company also closed 220 deals worth at least $1 million during the quarter.
That gives investors something more tangible than an AI narrative: rapidly expanding revenue, government demand, commercial adoption and cash generation.
Burry Could Be Right — Eventually
Granted, Palantir’s valuation leaves little room for disappointment. A company trading at 69 times sales doesn’t merely need to grow; it needs to keep growing fast enough to justify the expectations embedded in its stock price.
For Burry’s prediction to be right, Palantir’s government moat would have to erode, its commercial growth would need to collapse, competition would have to commoditize its software, all just as Palantir’s cash generation capabilities deteriorate. Only then could a 99% decline in valuation occur.
I would not want to be on the short side of that bet. Even if Burry is right, as famed economist John Maynard Keynes once noted, “the market can remain irrational longer than you can remain solvent.”
For investors, the relevant question isn’t whether Palantir could theoretically be worth $1 decades from now. It’s whether the company’s competitive position and financial performance are likely to deteriorate enough to justify that valuation today.
Key Takeaway
In short, smart investors shouldn’t dismiss Burry’s warning. Palantir’s valuation is a genuine risk, and its stock-based compensation and infrastructure commitments deserve scrutiny. But a $1 intrinsic value requires far more than multiple compression. It requires Palantir’s government franchise, commercial expansion and extraordinary cash generation to effectively collapse.
That isn’t what the latest numbers show. Burry may eventually win this bet. But with revenue growing 93%, commercial sales increasing 149%, government revenue rising 90% and adjusted free cash flow reaching $1.22 billion in the latest quarter, the evidence currently looks much more like an expensive, rapidly growing company than a business worth $1 per share in the long run. As Keynes also noted, “In the long run, we are all dead.”
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