A good company can still be a bad investment at the wrong price.
Michael Burry has seen this movie before — or at least he thinks he has. The investor who famously shorted the housing market before the 2008 collapse announced Friday that he is holding firm on his bet against Palantir Technologies, even as a presidential endorsement sent the stock bouncing off its lows.
Burry disclosed his position in a Substack post, confirming he holds two sets of long-dated put options on the AI software company: June 2027 puts with a strike price of $50, and December 2026 puts with a strike price of $100. He was unambiguous about his intentions. He is not selling.
The timing of the post was notable. Earlier Friday, President Trump took to Truth Social to praise Palantir, writing that the company had proven its warfighting capabilities and urging skeptics to ask the country's enemies. The post gave the stock a visible lift after three days of steep selling. Even so, Palantir was still headed for a weekly decline of roughly 13%, and its losses for 2026 had accumulated to around 28% by Friday's close. The stock was trading near $127 a share.
Burry began building his short position in the fall of 2025, and has rolled it forward multiple times since — a sign that he is not simply waiting out a brief dip but is committed to a longer thesis. His core argument is that Palantir, despite its real-world utility and government contracts, is trading at a price that bears no reasonable relationship to what the company is actually worth. He put that fundamental value at well under $50 a share — less than half of where it sat on Friday.
The stock had reached a peak near $200 last year, and Burry has watched it slide from those heights while maintaining that it remains, in his words, wildly overvalued. He acknowledged that Trump's endorsement could give the stock a short-term tailwind, but framed that as noise rather than signal.
Palantir occupies a particular position in the current political and military landscape. The company does substantial business with the Pentagon and U.S. intelligence agencies, and some investors see it as a direct beneficiary of ongoing military engagements, including the conflict with Iran. Under the second Trump administration, Palantir has been landing new government contracts and deepening its ties with the Defense Department. CEO Alex Karp has kept himself visible in Washington, navigating earlier friction with the administration to maintain access and influence.
This is not the first time Burry and Karp have found themselves in public opposition. When Scion Asset Management — the fund Burry formerly ran — disclosed bearish positions against both Palantir and Nvidia last year, Karp responded with characteristic bluntness, calling the wagers super weird and, in a phrase that circulated widely, something considerably more colorful.
The broader context matters here. Palantir has been selling off alongside the wider software sector, which has faced pressure as investors reassess valuations in a higher-rate, higher-uncertainty environment. Burry's bet is not simply that Palantir is overpriced relative to its peers — it is that the company's underlying fundamentals cannot support anything close to its current market price, regardless of presidential praise or Pentagon contracts.
Whether Burry is right depends on a question that markets have been arguing over for years: how much is a company worth when its technology is genuinely useful but its valuation assumes a future that may never fully arrive. The next real test will come as Palantir reports earnings and as the government contracting pipeline either delivers or disappoints. Burry, for his part, has set his expiration dates well into 2027 — he is in no hurry.
Notable Quotes
I believe the fundamental value of this company is well under $50 per share.— Michael Burry, via Substack
Palantir Technologies has proven to have great warfighting capabilities and equipment. Just ask our enemies.— President Donald Trump, via Truth Social
The Hearth Conversation Another angle on the story
Why would Burry hold this position after a sitting president just publicly endorsed the stock?
Because he thinks the endorsement is a sentiment event, not a valuation event. Trump's post moved the price, but it didn't change the company's revenue or earnings.
What exactly is a long-dated put, and why does it matter that these expire in 2026 and 2027?
A put option gives you the right to sell a stock at a set price. Long-dated means Burry isn't betting on a crash next week — he's giving himself a year or more for the thesis to play out.
He says the stock is worth under $50. It's trading at $127. That's a massive gap. What's his argument?
Essentially that the market is pricing in a future that's too optimistic — that Palantir's government contracts and AI positioning don't justify a valuation that high when you look at actual earnings and growth rates.
Palantir does real work with the military. Doesn't that give it a durable revenue base?
It does, and Burry isn't disputing that the company is useful. His argument is about price, not product. A good company can still be a bad investment at the wrong valuation.
Karp called Burry's bets crazy last year. What does that dynamic tell us?
That Karp takes it personally, which is interesting in itself. CEOs don't usually respond to short sellers by name unless the position is large enough — or public enough — to sting.
Burry has rolled the position multiple times. What does that signal?
Patience, and conviction. Rolling a short costs money each time. He's not just holding on — he's actively paying to stay in the trade.
Is there a scenario where Burry is simply wrong?
Absolutely. If Palantir lands transformative government contracts, or if AI spending accelerates faster than expected, the stock could climb well past where it is now. Short sellers have been burned on high-conviction tech bets before.
What should we watch to know how this resolves?
Earnings reports, the pace of Pentagon contract awards, and whether the broader software selloff continues or reverses. Burry has until late 2027 — a lot can happen.