The market is showing signs of panic over Palantir Technologies Inc., even as the data analytics company delivers one record-shattering quarter after another. Investors are offloading the stock in droves despite spectacular financial results, creating a puzzling disconnect. Compounding the uncertainty, prominent investor Michael Burry has taken a position betting against the company. What explains this contradictory situation?
Spectacular Growth Fails to Impress
From a fundamental business perspective, Palantir’s position appears exceptionally strong. Its third-quarter results significantly surpassed market expectations, demonstrating robust performance across its entire operation:
Should investors sell immediately? Or is it worth buying Palantir?
- Revenue surged by 63% to $1.18 billion, exceeding analyst forecasts.
- The commercial segment in the U.S. saw an incredible 121% expansion.
- Government contracts, the company’s traditional foundation, grew by a solid 52%.
- The full-year 2025 outlook was raised to approximately $4.4 billion.
- The total contract value hit a record $2.8 billion, representing a 151% increase.
Valuation Concerns Trigger Sell-Off
The primary force driving the intense selling pressure is growing investor anxiety over Palantir’s valuation. Following a massive rally in previous months, doubts are emerging about whether the stock’s extreme valuation multiples can still be justified. This has triggered a classic “sell the news” reaction, where aggressive profit-taking occurs even on the back of strong quarterly figures. The bearish sentiment was further amplified by the disclosure that Michael Burry—famous for his role in “The Big Short”—holds put options on Palantir through his firm, Scion Asset Management. This move means the celebrated investor is wagering on a declining share price.
Technical Breakdown Accelerates Decline
The sell-off gained severe momentum in the market. Share values fell by more than 5% on November 13 alone, followed by an even steeper 6.5% drop the next Thursday. Over the course of the first week of November, the total loss amounted to nearly 14.5%. This downward trend pushed the price toward critical technical support levels that had previously underpinned the rally, signaling a fundamental shift in market sentiment. The contradiction between the company’s operational excellence and its stock performance has rarely been more pronounced.
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