A dramatic public confrontation has erupted between Palantir Technologies CEO Alex Karp and famed investor Michael Burry, creating a stark divide in market sentiment. This clash unfolds against the backdrop of the data analytics firm reporting its strongest quarterly performance to date, placing the company’s controversial valuation squarely under the microscope.
Unprecedented Quarterly Performance
Palantir’s third-quarter earnings report silenced many skeptics, delivering results that significantly surpassed market expectations. The company generated $1.18 billion in revenue, a figure that handily beat analyst projections of $1.09 billion. This represents a staggering 63 percent year-over-year expansion.
Profitability metrics were even more compelling, with earnings per share doubling to $0.21. This result exceeded forecasts by a substantial 25 percent margin. The nearly half-billion dollars in quarterly profit marks a historic achievement for the two-decade-old firm.
A particularly noteworthy development was the explosion in Palantir’s U.S. commercial business, which surged 121 percent to $397 million. This robust growth helps alleviate long-standing concerns about the company’s previous heavy reliance on government contracts, demonstrating a successful strategic pivot toward corporate clients.
Should investors sell immediately? Or is it worth buying Palantir?
The “Rule of 40” Benchmark
CEO Alex Karp highlighted a monumental “Rule of 40” score of 114 percent, the highest in the company’s history. This key performance indicator, which combines revenue growth with operating margins, places Palantir in a league of its own when compared to sector peers. Competitors such as Snowflake, Datadog, and ServiceNow posted scores of 47 percent, 56.7 percent, and 53 percent, respectively.
A Battle of Financial Philosophies
The conflict ignited when it was revealed that Michael Burry—the investor celebrated for predicting the 2008 financial crisis—has taken a bearish position against Palantir through put options. This move aligns with a late-October social media post, his first in two years, where he cautioned about an emerging artificial intelligence bubble.
Karp responded with forceful public criticism during a November 4th CNBC appearance, describing Burry’s stance as “bats.” This direct exchange between a sitting CEO and one of the world’s most prominent short sellers represents an unusual public spectacle, with billions of dollars in market value at stake.
The Core Disagreement: Valuation
The fundamental disagreement centers on Palantir’s market valuation. Karp points to the company’s powerful fundamental business performance as justification for its stock price. Conversely, Burry perceives symptoms of overheated AI market enthusiasm that he believes echo the excesses of the dot-com era, leading him to bet against the company’s future share performance.
Ad
Palantir Stock: Buy or Sell?! New Palantir Analysis from November 12 delivers the answer:
The latest Palantir figures speak for themselves: Urgent action needed for Palantir investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from November 12.
Palantir: Buy or sell? Read more here...
