Michael Burry Bets Palantir Will Fall Below $50 — Here’s What That Says About AI Hype

Palantir’s current stock price is more than 60% above Michael Burry’s $50 fair value estimate. The stock trades at nearly 100 times its projected 2024 earnings of $1.30 per share. Analysts project Palantir’s earnings will rise to $1.80 per share in 2025 and $2.50 in 2028. Even on projected earnings, Palantir trades at more than 50 times its expected 2026 earnings. The S&P 500 trades at a forward P/E of 21, Microsoft at 20, and Alphabet at 25. Palantir’s valuation is more than double that of its most richly valued peers despite similar or slower growth prospects. Burry argues that hype, not fundamentals, is driving Palantir’s stock price. There is no significant barrier to entry in Palantir’s decision-intelligence market, increasing competitive risk from firms like Microsoft and Alphabet. Investor enthusiasm for AI is already showing signs of cooling, undermining support for premium valuations. Retail investors face outsized risk from volatility and prolonged mispricing that institutional traders like Burry can endure. For most individual investors, choosing not to invest in Palantir may be the most rational financial decision.