Michael Burry vs Palantir saga is far from over. ‘The Big Short has increased his criticism of Palantir Technologies Inc., combining ethical allegations with a bearish technical outlook that claims the stock could fall sharply this year.

Burry has used social media and a recent Substack post to question Palantir’s corporate conduct, financial reporting, and valuation. His comments come after a strong rally in Palantir shares over the past two years.

Claims of ‘covert smear’ campaigns

Burry recently posted on X questioning whether Palantir has been involved in what he described as “covert smear campaigns” against critics of the company and its leadership. In a sarcastic post referencing “urine drones,” he asked the public to come forward with evidence of such practices.

The post caught attention to an ongoing controversy involving the UK’s National Health Service. Reports shared by Burry claimed the NHS is investigating whether Palantir violated contract terms by allegedly hiring a digital marketing agency to recruit influencers to counter public criticism.

Burry shared a quote from Good Law Project Executive Director Jo Maugham, who said, “Palantir is not – and frankly never has been – a company that can be trusted with this nationally important contract.”

Burry added in his own post: “Let’s try this again. If you have real evidence that Palantir has continued this practice of covert smearing campaigns against the enemies Karp and $PLTR cannot quite reach with Fentanyl-laced urine drones, please contact me. Also please contact me if you simply know something…”

Burry’s technical analysis of the stock

Alongside his ethical concerns, Burry has also laid out a technical argument for why Palantir’s stock could drop significantly. In a chart shared on February 10, 2026, he pointed to a classic “Head & Shoulders” pattern, which traders often view as a sign of a potential trend reversal.

According to Burry’s analysis, the next major support level sits near $80, with a possible “landing area” between $50 and $60. With Palantir shares recently trading around $131.41, a fall to $60 would amount to a decline of more than 54%.

Explaining his exposure, Burry previously wrote, “I bought 50,000 of these things… Each of those doodads let me sell $PLTR at $50 in 2027.” He later added in another post, “I am working on something $PLTR.”

In a recent Substack newsletter, Burry said he believes Palantir’s recent success will not last. He also pointed on the high spending, accounting practices, and what he sees as inflated margins as key risks.

According to a report by Business Insider, Burry argued that Palantir’s financial structure paints a more optimistic picture than reality.

He noted that Palantir was unprofitable for nearly its first 20 years. During that period, he claimed the company struggled to generate compounding sales, meaning new deals did not reliably lead to future growth.

“So Palantir was like a shark, to grow it needed to just keep swimming, adding as many deals as it could,” Burry wrote in the substack

Burry says Palantir’s spending habits raise red flags

Burry also focused heavily on Palantir’s spending history. He pointed to more than $450 million invested in SPACs during the pandemic, many of which later lost value. He also referenced unverified claims from former employees indicating that a large imbalance in how compensation is distributed between top executives and the rest of the workforce.

Before going public, Palantir accumulated roughly $3.8 billion in losses, Burry said. He added CEO Alex Karp’s stock-based compensation, which exceeded $1 billion around the time of the company’s IPO. “If you have not realized it by now, the company really knows how to throw money around,” Burry wrote.

Another major concern raised by Burry involves how Palantir reports its costs. He suggested that certain expenses were included in research and development spending before the IPO in a way that may have inflated reported figures.

He also questioned Palantir’s gross margins, arguing that the way the company splits costs related to its forward-deployed engineers across departments could make margins appear higher than they truly are.

“If Palantir were following the accounting standards of Accenture or Deloitte, gross margins would collapse. The SaaS/software charade would be obvious. The stock would also likely have a price to sales multiple magnitude lower,” he wrote.

Regardless of these concerns, Palantir’s stock has surged in recent years, more than doubling in 2025 after jumping 340% in 2024. Much of the rally has been due to rising revenue and enthusiasm around its Artificial Intelligence Platform.

Burry argued that expectations are now dangerously high. He pointed to what he called the company’s unusually high ratio of billionaires to revenue, which he labelled the “B/S ratio.”

“Such B/S speaks to egregious stock based compensation paired to remarkably few dollars of revenue. But it really is an expectations ratio. And if it is the highest in history, so are expectations for Palantir,” he wrote.

In his analysis, Burry suggested Palantir’s stock could be worth as little as $46 per share, about 66% below current levels. He also outlined a wide range of possible outcomes between $21 and $146, while stressing that these were not firm price targets and that he was not predicting a strong long-term future for the company.

Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a registered financial advisor in the respective jurisdiction.