Generated Title: Palantir: From Anti-Woke Savior to Overvalued AI Play? A Data Analyst's Skepticism
Palantir, the Peter Thiel-backed data analytics firm, has never shied away from controversy. Recent pronouncements from CEO Alex Karp, positioning the company as "completely anti-woke," have only amplified the noise. But beyond the political theater, what's the real story? Is Palantir a shrewd investment, or is it riding a wave of AI hype towards an inevitable correction? Let's dig into the numbers.
The Anti-Woke Narrative and its Financial Impact
Karp's recent statements, including lauding Palantir for "powering ICE" and supporting Israel, have certainly resonated with a specific segment of the market. He claims these values have helped the company deliver "venture-quality results" to "normal Americans." But do the financials back up this claim, or is it just clever marketing?
The company reported nearly $1.2 billion in revenue for the period ending in September, a 63% increase year-over-year. US commercial revenue more than doubled, up 121% to $397 million, and US government revenue grew 52% to $486 million. Karp even went so far as to claim these were "arguably the best results that any software company has ever delivered." Hyperbole aside, the growth is undeniable. But is it sustainable? And is it because of their anti-woke stance? That's harder to quantify.
It is worth noting that Palantir's messaging seems to be resonating with other tech leaders, too. We've seen figures like Sam Altman and Mark Zuckerberg cozying up to Trump, and even Marc Benioff briefly calling for the National Guard in San Francisco. Are these isolated incidents, or a sign of a broader shift in Silicon Valley?
The Michael Burry Factor: A Contrarian Bet
Enter Michael Burry, the investor made famous by "The Big Short," who has placed a significant bet against Palantir. As of September 30th, Burry's Scion Asset Management held put options on 5 million shares of Palantir, valued at approximately $912 million. That's a hefty wager that the stock is overvalued. He also shorted Nvidia. (Why short Nvidia? That's a question for another time.)
Karp, predictably, didn't take kindly to Burry's skepticism, calling the move "bats--t crazy" and even suggesting market manipulation. "The two companies he’s shorting are the ones making all the money, which is super weird,” Karp told CNBC. “He’s actually putting a short on AI. … It was us and Nvidia.” As Karp said this, he was blasting ‘Big Short’ investor Michael Burry for bet against his company: ‘Bats–t crazy!’ Palantir CEO Alex Karp blasts ‘Big Short’ investor Michael Burry for bet against his company: ‘Bats–t crazy!’
But let's look at the numbers. Palantir entered the week trading at more than 300 times projected 2025 earnings, according to FactSet data. That's a massive multiple. Even with impressive growth, justifying that valuation is a stretch. I've looked at hundreds of these filings, and that kind of multiple is usually reserved for companies with truly disruptive, paradigm-shifting technology. Is Palantir that disruptive?
The company's AI software is undoubtedly valuable, particularly to government clients. But is it worth 300 times earnings? Burry clearly thinks not. And while Karp dismisses Burry's concerns, the market reacted negatively to the news, with Palantir shares tumbling about 9% despite the company posting better-than-expected quarterly results.
The Cult of Palantir: A Double-Edged Sword
Karp makes "sure Palantir stays as tribal and cultish and unique as it was 20 years ago" by recruiting "the right people." This intense company culture might be a strength – fostering loyalty and driving innovation. But it also carries risks. Lisa Gordon, Palantir's communications chief, called the company's political shift toward Trump "concerning." When your internal communications chief is publicly expressing reservations, that's a red flag.
It’s like a high-performance race car: the same engine that wins races can also explode if pushed too hard. Can Palantir maintain its breakneck growth and intense culture without burning out?
So, What's the Real Story?
Palantir is a complex company with a compelling narrative. Its anti-woke stance has clearly resonated with some, and its financial performance is undeniably strong. But the valuation is eye-watering, and Michael Burry's short position should give investors pause. Ultimately, whether Palantir is a good investment depends on your risk tolerance and your belief in the company's long-term vision. But before you jump on the bandwagon, take a hard look at the numbers and ask yourself: is this growth sustainable, or is it a bubble waiting to burst?
