Michael Burry's $1 Billion Short on Palantir Reveals a Shift in AI Software Valuations

Retail investors who entered Palantir during the 2025 AI frenzy are down approximately 26% year-to-date as of April 2026. This decline is driven by a nearly $1 billion notional short position established by Michael Burry of Scion Asset Management through long-dated put options. The bet is based on a forward price-to-earnings (P/E) ratio of roughly 147x, which Burry describes as "math-defying."

Competing generative AI models, such as Anthropic's "Claude Mythos," have reached an annual recurring revenue (ARR) of $30 billion. These plug-and-play models offer data synthesis at a lower price point and greater speed than Palantir's consultant-heavy installation model. Additionally, a Pakistan-brokered ceasefire between the U.S. and Iran has removed the "war premium" that had propped up the company's defense-heavy valuation.

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short selling

Michael Burry’s Palantir Short Points to a $77 Gap Between Price and His Estimate of Fundamental Value

Palantir stock traded at approximately $127 per share on Friday, more than double Michael Burry’s estimate of its fundamental value. Burry holds long-dated put options on the company with strike prices of $50 and $100, including June 2027 $50 puts and December 2026 $100 puts, and has no plans to exit the position. He believes the stock’s intrinsic worth is well under $50 per share, creating a gap of over $77 between current price and his valuation. The difference underscores a stark divergence between market sentiment and Burry’s assessment. He has maintained this bearish stance since the fall of 2025, rolling the position multiple times. Despite a recent post by President Trump praising Palantir’s “great warfighting capabilities” on Truth Social, the stock remains down about 28% in 2026. Palantir has secured new government contracts and expanded its work with the Pentagon during Trump’s second term, yet Burry sees no justification for its premium valuation.

Palantir shares shed over 13% of their value in the first week of April 2026.

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retirement planning

You pay the tax now so your heirs won’t have to

You pay the tax now so your heirs won’t have to. That’s the core tradeoff behind a Roth IRA conversion — a move that shifts the tax burden from your beneficiaries to yourself, on your terms. For most non-spouse heirs, inherited traditional IRAs come with a 10-year rule: all funds must be withdrawn by the end of the decade following the account holder’s death. Every dollar pulled out is taxed as ordinary income, potentially pushing a beneficiary into a high tax bracket at a moment of emotional and financial strain. Spouses can roll over a deceased partner’s traditional IRA into their own, but taxes remain inevitable on every withdrawal. A Roth IRA conversion changes that equation. When you convert a traditional IRA or 401(k) to a Roth, you pay income taxes on the converted amount in the year of the transfer. That’s not an escape — it’s a relocation. The benefit? Once the account has been open for at least five years, all withdrawals, including earnings, are tax-free for your heirs. Non-spouse beneficiaries still must empty the account within 10 years, but they do so without a single dollar going to the IRS. You control when the tax hit occurs: during a market downturn, in a low-income year, or gradually over several years to stay within a favorable tax bracket. And because you can pay the conversion tax with outside funds, you preserve the full balance of your retirement account for tax-free growth. The IRS doesn’t allow loopholes — just options. This is one where the math and the legacy align.

Related Brief1d ago

short selling

Michael Burry’s Palantir Short Points to a $77 Gap Between Price and His Estimate of Fundamental Value

Palantir shares shed over 13% of their value in the first week of April 2026.

Related Brief1h ago

retirement planning

You pay the tax now so your heirs won’t have to

Michael Burry's $1 Billion Short on Palantir Reveals a Shift in AI Software Valuations

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Michael Burry's $1 Billion Short on Palantir Reveals a Shift in AI Software Valuations

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Read More Analysis

A $226 million stock purchase signals that Berkshire’s new leadership sees value where others see risk

USPS Proposed Stamp Price Hike to Offset $118 Billion Cumulative Loss