At roughly 122 times projected 2026 earnings, Palantir Technologies (NASDAQ: PLTR) carries one of the most demanding valuations in the artificial intelligence software sector.
That premium faces a direct test as the company reports third-quarter results on November 2, with analysts watching closely for any sign of decelerating growth.
Wall Street has set expectations at $2.18 billion in Q3 revenue, a figure that actually sits above Palantir’s own guidance range, creating an unusual situation where hitting management’s targets would still fall short of consensus.
The bar was raised partly by a standout first quarter, when Palantir posted $1.63 billion in revenue and beat the high end of guidance by roughly 6%.
Among those skeptical the momentum can last is Michael Burry, the investor made famous by his prescient bet against mortgage-backed securities before the 2008 financial crisis, who has maintained a short position against Palantir since the fall of 2025.
Burry no longer manages a hedge fund, but he remains an outspoken market participant, and he sharpened his position in October rather than walking it back when he restructured most of his other bearish bets.
His conviction deepened even after President Donald Trump publicly praised the capabilities Palantir’s platform provides the U.S. military, a statement that briefly sent shares higher after a steep three-day decline of 18%.
Writing on Substack following the presidential endorsement, Burry was blunt: “I now own the [Palantir] June 17, 2027 Strike Price 50 Puts and the December 18, 2026 Strike Price 100 Puts. I am not selling these today.”
He added, “Trump’s post rallied the stock after the stock had fallen 18% the last three days. [but] As mentioned, I continue to hold the puts, as I believe the fundamental value of this company is well under $50/share.”
For Burry’s position to profit, growth would need to slow sharply over the next year or so, making each quarterly report a crucial data point in testing his thesis.
Two metrics in particular carry the most weight when assessing whether Palantir’s trajectory can sustain its current multiple.
The first is U.S. commercial total contract value, which surged 153% to $2.132 billion in the most recent quarter, a figure that signals strong enterprise adoption but becomes increasingly difficult to replicate off a larger base.
Palantir has set a full-year commercial revenue target of at least $3.424 billion for 2026, a goal that requires approximately 22% quarter-over-quarter growth through the remainder of the year to achieve.
Whether corporations are still embracing Palantir’s AI software faster than the company itself forecast will be visible in whether actual results push meaningfully above that commercial guidance threshold.
The second metric is margins, where Palantir already reported an adjusted operating margin of 62%, though management flagged that the third quarter would see a notable increase in expenses related to new-hire seasonality and marketing campaigns.
Stock-based compensation also remains a significant line item, running at $265 million last quarter, and any further expansion there would add complexity to the margin picture.
A strong November 2 report would not immediately invalidate Burry’s long-term view, but it would make his under-$50 price target considerably harder to defend against a market still rewarding the company’s growth narrative.
