Palantir Stock: Red Alert! Why Michael Burry’s Bet and CEO’s Sell-Off Spell Trouble

• Why Is Michael Burry Shorting Palantir?
• CEO Alex Karp’s $96 Million Sell-Off: Bad Timing?
• Operational Success vs. Valuation Concerns
• Technical Analysis: How Low Can It Go?
• FAQ: Your Burning Questions Answered

Palantir, once the undisputed high-flyer of 2025, now faces a storm of skepticism. Legendary investor Michael Burry (of "The Big Short" fame) has placed a massive $912 million short bet against the company, while CEO Alex Karp unloaded $96 million in shares. Operationally, Palantir thrives—revenue up 63% thanks to its AI platform—but its sky-high P/E ratio of 375 suggests a bubble waiting to burst. With the stock already down 25% from its peak, investors are left wondering: Is this a buying opportunity or a sign to exit? Here’s the breakdown.

Why Is Michael Burry Shorting Palantir?

Michael Burry’s Scion Asset Management recently acquired put options against Palantir, signaling his belief that the stock is overvalued. Burry, known for spotting market bubbles early (remember the 2008 housing crash?), seems to think Palantir’s "AI premium" is unsustainable. His $912 million wager isn’t just a hunch—it’s a calculated bet that the stock will correct further before stabilizing. In my experience, when Burry talks, markets listen. This MOVE echoes his 2021 GameStop short, which preceded a 40% drop.

CEO Alex Karp’s $96 Million Sell-Off: Bad Timing?

Insider sales happen, but Karp’s timing couldn’t be worse. Dumping shares amid a broader AI stock slump—and right after Burry’s bearish bet—fuels investor anxiety. While Palantir claims these sales are pre-planned (yawn), the optics stink. It’s like watching a captain abandon ship during a squall. Historical data from TradingView shows that insider sell-offs at this scale often precede volatility.

Operational Success vs. Valuation Concerns

Here’s the paradox: Palantir’s business is firing on all cylinders. Revenue surged 63% last quarter, powered by its AI Platform (AIP) adoption in commercial sectors. Margins are improving, and cash flow looks healthy. But let’s be real—a P/E ratio of 375 prices in perfection. For context, even Nvidia trades at a P/E of 90. Analysts at BTCC note that such extremes often lead to brutal corrections, like the 2022 tech rout.

Technical Analysis: How Low Can It Go?

The stock’s chart tells a grim tale: down 25% from its 52-week high, with 10% lost last week alone. Key support levels around $18 (per CoinMarketCap data) are now in play. If those break, we could see a slide toward $15—a level not seen since early 2024. With no earnings reports due soon, the stock’s fate hinges on market sentiment and institutional moves.

FAQ: Your Burning Questions Answered

Should I buy Palantir stock now?

Not so fast. While the AI growth story is compelling, Burry’s short and Karp’s sell-off suggest turbulence ahead. Wait for clearer technical signals or a valuation reset.

Is Palantir’s AI hype justified?

Yes—but hype ≠ value. AIP is gaining traction, but at 375x earnings, the stock assumes flawless execution for years. Even Tesla didn’t sustain such multiples forever.

What’s the biggest risk for Palantir?

Valuation contraction. If growth slows even slightly, the P/E could snap back violently, à like Zoom in 2021.