Michael Burry Refreshes Bearish Palantir Trade Even As AI Rally Strains Short Bets

• Michael Burry has re-entered out-of-the-money put trades on Palantir Technologies Inc., purchasing March 2027 puts with strike prices in the low-to-mid $100s as option volatility cooled. 
• Burry sees Palantir shares at under $1 over the long run. 
• The investor added to his position in animal health leader Zoetis Inc., arguing its share price decline has cleared out weak-handed retail investors while offering superior margins over competitors. 

Investor Michael Burry on Monday doubled down on his high-stakes bet against Palantir Technologies Inc. (PLTR), re-establishing out-of-the-money put positions even as the software firm’s stock continues to trade near historic highs.

Writing in his Cassandra Unchained report, Burry revealed that he bought PLTR March 2027 puts struck in the low-to-mid $100 range. The move follows a period in which Burry had partially covered his short near $107. Taking advantage of a drop in implied volatility that brought options pricing down to multi-month lows, Burry refreshed his bearish stance on the enterprise AI company, which he notes is once again trading at nearly 69 times sales.

Burry’s renewed push comes after short sellers faced intense market pressure following Palantir’s strong quarterly earnings. Driven by soaring demand for its Artificial Intelligence Platform (AIP) across commercial enterprise and government sectors, Palantir recently delivered impressive revenue and profit growth. The stock’s ensuing surge squeezed bears, forcing short sellers into a defensive corner as market enthusiasm around artificial intelligence pushed valuation multiples to extreme levels.

Palantir’s Earnings Spark and Burry’s Long-Term Skepticism

Palantir’s latest financial report showcased rapid expansion, led by accelerating U.S. commercial revenue, expanding operating margins, and full-year guidance increases that re-energized retail and institutional bulls alike. Total quarterly revenue topped estimates as more enterprise clients deployed AIP into production workflows, helping push GAAP net income over the past year toward the $3.0 billion mark.

The strong quarterly performance pushed Palantir’s stock to jump nearly 40% during the week ending August 7. 

Despite those surface gains, Burry argues the corporate narrative masks deep structural risks. Pointing out that Palantir issued 31.3 million shares to staff worth roughly $5 billion over the past year, which amounts to about six times its stock-based compensation expense, Burry highlighted what he called the widest accounting gap among 66 companies he recently reviewed. He further noted that off-balance-sheet non-cancellable infrastructure purchase commitments have more than tripled this year, leading him to conclude that the stock is intrinsically worth under $1 in the long run.

Burry Builds Stake in Animal Health Leader Zoetis

Beyond his short book, Burry disclosed that he added to his long equity position in animal health firm Zoetis Inc. ( ZTS) as shares languished in the low $70s.

Zoetis has seen significant share turnover since its 2021 peak of around $250 per share, trading through multiple times its float. Burry stated that the stock has exhausted its weaker-handed holders and is positioned for a multi-year stabilization.

Comparing Zoetis with rival Elanco Animal Health Inc., Burry highlighted Zoetis’ superior financial footing, noting its higher gross margins and low interest coverage burden relative to Elanco’s heavily leveraged balance sheet. 

Though Zoetis recently ceded market share in U.S. in-clinic dermatology, Burry dismissed fears of terminal decline, framing Wall Street’s recent impatience with management’s recovery timeline as a buying opportunity for long-term investors.

PLTR Stock: Retail View 

Retail sentiment on Stocktwits was ‘extremely bullish’ with ‘high’ message volumes. Retail chatter on the stock has surged over 300% from the previous session. 

One user backed the short trade by saying Palantir will find it difficult to stay relevant in the long run. 

But, a host of retail investors on Stocktwits were overall bullish on PLTR and seemed to disapprove of Burry’s short play. 

PLTR stock has lost 6% year-to-date. 

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