Palantir Technologies shares edged higher in early Friday trading, climbing 1.2% to $130.71, as the stock attempted to recover from a steep decline in the previous session. The rebound came amid mixed signals from a prominent investor and a significant regulatory approval for its government business.
Burry's Bearish Stance
Investor Michael Burry, known for his prescient bet against the U.S. housing market, disclosed put options on Palantir and suggested the stock could be worth as little as $46. While clarifying he is not directly short the shares, his bearish valuation commentary contributed to Thursday's sell-off. The stock had already retreated from its November highs before Burry's note amplified concerns about its elevated valuation amid the broader AI investment frenzy.
Defense Contract Expansion
Offsetting some negative sentiment, Palantir announced that the Defense Information Systems Agency (DISA) has granted an expanded Authorization to Operate for its Palantir Federal Cloud Service. This clearance broadens existing provisional authorizations to include on-premises and edge computing environments, potentially opening new deployment opportunities within U.S. defense infrastructure. "The future of warfighting demands software that can operate anywhere," stated Akash Jain, President and CTO of Palantir USG.
Financial Performance and Analyst View
The company's latest quarterly results exceeded expectations, driven primarily by a 66% surge in U.S. government revenue to $570 million. Total revenue reached $1.41 billion, surpassing analyst forecasts. Despite this strength, DA Davidson maintained a neutral rating following Burry's critique, noting it found "no new evidence" to alter its outlook while acknowledging the stock's potential for continued volatility.
Markets will be closed Monday for the Presidents Day holiday. The ongoing tension between Palantir's robust government contract growth and valuation concerns suggests the stock may remain susceptible to sharp swings in investor sentiment.
