Michael Burry still holds bearish bets on Palantir ahead of its third-quarter report on Nov. 2. The Motley Fool's Daniel Sparks argues that total revenue and U.S. commercial revenue matter most for judging them.
Michael Burry kept his Palantir put options when he rolled most of his bearish wagers into two index positions on Oct. 11. Put options gain value if the stock drops. Palantir posts its third-quarter results on Monday, Nov. 2, after the market closes.
Shares have not cooperated yet. Palantir hit a record close of $209.05 on Oct. 9, and at around $195 as of the source's writing it sat only about 7% under that peak.
Burry's bet now stretches into 2027
Burry has been betting against Palantir since the fall of 2025. In a Sept. 28 post, he traded his outright short positions in Palantir and seven other holdings for put options expiring between June and December 2027. He argued that the AI build-out is increasingly funded by debt and might fall apart if spending slows.
But put options expire. For Burry's puts to pay off, Palantir's growth probably has to slow sharply in the coming year or so.
Guidance implies slower growth, but Palantir tends to beat it
Palantir's guidance calls for third-quarter revenue of $2.160 billion to $2.164 billion, around 83% growth year over year and slower than 93% growth in the second quarter.
Palantir, however, tends to set its forecasts low. Its second-quarter revenue of $1.94 billion beat the top end of its own forecast by about 7%.
If the third quarter clears its range by a similar margin, revenue could land around $2.3 billion, or growth of about 95%. A result close to $2.16 billion, though, might suggest that growth slowed.
U.S. commercial revenue must keep climbing
The second number is U.S. commercial revenue. It climbed 149% year over year to $764 million in the second quarter.
Management expects U.S. commercial revenue of at least $3.424 billion in 2026. The first half brought in about $1.36 billion, so the second half needs about $2.07 billion. That probably means quarter-over-quarter growth of about 22% in each of the final two quarters, or third-quarter U.S. commercial revenue of about $930 million.
Sparks writes that even two strong numbers would not make the stock cheap. At about $195, it costs about 166 times the earnings Palantir reported in its past four quarters. By his math, at $50 shares would cost about 43 times reported earnings, which he calls a modest price for a growth stock whose revenue rose 93% in its latest quarter.
Source: The Motley Fool
Trading involves risk.
Risk Disclaimer
