In the face of a broader market recovery today, Palantir Technologies (PLTR 1.34%) was under pressure, with the stock falling as much as 7.3%. As of 3:51 p.m. ET, the stock was still down 6.6%.
The catalyst that sent the data mining and artificial intelligence (AI) specialist lower was a bleak outlook from a famed investor.
Image source: The Motley Fool.
The Big Short
Most investors have likely heard the name Michael Burry. The noted investor predicted the subprime lending crash in 2008, making a veritable fortune in the process. He placed high-stake bets that made him $100 million personally and $725 million for his investors. His name will forever be associated with the movie that profiled these events, The Big Short.
Burry has waged a months-long campaign against Palantir and Nvidia through his hedge fund, Scion Asset Management, and has taken significant short positions in the stocks -- essentially betting that their prices will fall.
He fired his latest salvo against Palantir in a post on X on Wednesday, saying that AI start-up Anthropic is "eating Palantir's lunch." Burry points to Anthropic's sizable increase in annual recurring revenue (ARR), from $9 billion to $30 billion, saying the start-up "offers the easier, cheaper, intuitive solution for businesses." He went on to point out that it took Palantir 20 years to generate $5 billion in revenue. In all fairness, he fails to mention that the AI revolution began, shifting the landscape.
NASDAQ: PLTR
Key Data Points
In hindsight, Burry's timing seems prescient. Since his dire warnings about AI and his attacks on Palantir and Nvidia began in early November, the stocks are down 26% and 9%, respectively (as of this writing).
As I have written before, Palantir's results are the ultimate rebuttal. In the fourth quarter, revenue climbed 70% year over year, marking the 10th consecutive quarter of accelerating revenue growth. This was driven by 137% growth in its U.S. commercial segment, which drove adjusted earnings per share (EPS) to $0.25, up 79%. These results seem to hamstring Burry's argument.
With all due respect to his fame and his reputation, Burry has a vested interest in pushing Palantir lower. I think this is impacting his judgment.
For my money, Palantir's a buy.
