Michael Burry Stays Bearish on Palantir Despite Trump Praise and Market Turbulence

Famed investor Michael Burry is standing firm on his bearish outlook for Palantir Technologies, even as public backing from Donald Trump briefly lifted the company’s stock.

Best known for predicting the 2008 financial crisis, Michael Burry revealed he continues to hold long-dated put options against Palantir, signaling his expectation that the stock will decline significantly in the future.

Trump’s Endorsement Fails to Reverse Decline

The controversy intensified after Trump praised Palantir’s military capabilities on social media, calling its technology vital for modern warfare, a backing that provided a short-term boost, but it failed to offset broader losses.

Palantir shares still recorded their worst week in over a year, dropping sharply amid a wider sell-off in technology stocks. The company’s stock has fallen nearly 30% in 2026, reflecting investor concerns over valuation and competition in the artificial intelligence sector.

Trump Backing Palantir

Why Burry Calls Palantir “Overvalued”

Despite the brief rally, Michael Burry remains convinced that Palantir is “wildly overvalued.” He believes the company’s intrinsic value is far below its current trading price, estimating it should be under $50 per share.

While acknowledging the possibility of short-term rebounds, Burry’s strategy focuses on long-term downside risk. His use of put options allows him to limit potential losses while betting on a significant correction.

This isn’t the first time Burry has aimed at high-growth tech stocks. His skepticism extends to the broader AI boom, which he has previously hinted may be forming a speculative bubble.

AI Competition Heats Up

A key factor in Burry’s bearish stance is rising competition in the AI industry. He has pointed to Anthropic as a major disruptor, suggesting its rapid growth and user-friendly tools are pulling market share away from Palantir.

According to Michael Burry, Anthropic’s expansion in enterprise adoption highlights a shift toward more accessible, “plug-and-play” AI solutions. This trend could challenge Palantir’s long-standing dominance in government contracts and data analytics.

Palantir’s Strong Ties to Government Contracts

Despite market concerns, Palantir continues to benefit from deep ties with U.S. government agencies, including defense and intelligence sectors. Its software has reportedly been used in military operations, reinforcing its strategic importance.

CEO Alex Karp has been vocal about supporting national security initiatives, aligning the company closely with government priorities. This relationship has helped secure contracts but has also drawn scrutiny from critics and watchdog groups.

Market Volatility and Investor Divide

The divergence between Trump’s endorsement and Michael Burry’s bearish position highlights a broader divide among investors. While some see Palantir as a key player in the future of AI and defense technology, others question whether its valuation reflects sustainable growth.

The recent volatility underscores the uncertainty surrounding tech stocks, particularly in a rapidly evolving AI landscape where new competitors can quickly reshape the market.

As Palantir navigates stock declines, political attention, and intensifying competition, its future remains uncertain. For now, Burry’s continued bet against the company signals caution, even as supporters remain optimistic about its long-term potential.

Whether Palantir rebounds or faces further correction could depend on its ability to adapt in an increasingly competitive AI market.