TLDR
- Michael Burry argues Palantir’s market cap of ~$432 billion could collapse below $100 billion
- Burry says Palantir’s deferred revenue ratio of 32% mirrors consulting firm Accenture, not software peers like Salesforce
- One customer represents 27% of Palantir’s $1.49 billion in accounts receivable, while contributing less than 10% of revenue
- Palantir stock fell 6% after Burry’s post on Sept. 2, then jumped 7.7% the next day on a new PwC AI partnership
- Palantir reported 93% year-over-year revenue growth last quarter and raised its full-year guidance
Michael Burry is back on Palantir. On Sept. 2, the investor behind The Big Short renewed his bearish case against Palantir Technologies (PLTR), warning that its roughly $432 billion market cap could eventually fall below $100 billion.
Palantir Technologies Inc., PLTR
That is a drop of more than 75% from current levels.
Burry’s argument is not about fraud. Every number he cites comes directly from Palantir’s own filings. His case is a reclassification argument: he believes Palantir earns and collects revenue more like a consulting firm than a software company, and therefore should not trade at a software valuation.
Palantir stock currently trades around $174, down more than 4% as of this writing.
The Consulting Comparison
The heart of Burry’s case is Palantir’s deferred revenue ratio. Software companies like Salesforce typically bill customers up front, creating large deferred revenue balances. Salesforce’s deferred revenue runs at over 150% of quarterly revenue.
Palantir’s deferred revenue sits at around $613 million, or 32% of its $1.94 billion second-quarter revenue. Accenture, the consulting giant, runs at about 40%. Even adding Palantir’s customer deposits, the figure only reaches around 55%.
Burry says this means Palantir collects like a consultant, not a software platform. Palantir itself acknowledges it has been shifting from multi-year upfront payments to annual or arrears billing. That is a legitimate business decision. But it is also exactly how consulting firms operate.
The Receivables Problem
Burry also flags Palantir’s growing accounts receivable. Receivables hit $1.49 billion at the end of June, up from $1.04 billion at the end of 2025. That is 43% growth in six months, outpacing 38% revenue growth over the same stretch.
More striking: a single customer, identified only as Customer I, accounts for 27% of total receivables. That works out to roughly $400 million owed by one customer. Yet no single customer accounted for more than 10% of revenue in the first half of the year.
That concentration is unusual for a software company. Burry has described it as possible evidence of weakening bargaining power or channel stuffing, though Palantir has not addressed those specific claims directly.
He has also cited CEO Alex Karp’s private jet expenses and the company walking away from a large authorized buyback after repurchasing only a small fraction of it.
Strong Results, Real Tension
Burry’s timing is awkward. Palantir posted 93% revenue growth year over year last quarter. U.S. commercial revenue grew even faster. Operating cash flow more than doubled in the first half to $2.1 billion. The company raised full-year guidance.
The stock proved that out in real time. After falling nearly 6% on Sept. 2 following Burry’s post, PLTR jumped 7.7% the next day when Palantir announced an expanded enterprise AI partnership with PwC. Palantir already has similar alliances with Deloitte and Accenture.
Burry has held Palantir put options since at least last fall. He first called the stock a “sand castle” in June, doubled down in August, and still holds the puts today.
In August, PLTR surged 51.4% while Burry added to his bearish position.
Stop guessing and start investing with confidence. KnockoutStocks gives you the AI insights, market intelligence, and stock research you need to spot opportunities, cut through the noise, and make smarter investment decisions — all in one powerful platform.
Sign up today and get 50% OFF full access to our premium stock picks.
Simply use coupon code SPECIAL50 at checkout to claim your exclusive discount.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
