Burry Sees 75% Crash for Palantir Stock Over Deferrals and Concentration

Michael Burry, a well-known investor and short seller, has continued to express his bearish views on Palantir Technologies (PLTR). In a recent post, he highlighted that the company's ~$432 billion valuation could drop below $100 billion, representing a staggering 75% decrease from present price levels.

The foundation of Burry's thesis rests on Palantir's deferred revenue metrics. Unlike traditional software enterprises like Salesforce, which typically invoice clients in advance and generate substantial deferred revenue positions, Palantir generates only 32% of its revenue through deferred means.

Burry also pointed out that one client accounts for 27% of Palantir's $1.49 billion accounts receivable, while representing under 10% of total revenue during the year's first half. This concentration is atypical for software businesses and may indicate diminishing negotiating leverage or revenue acceleration tactics.

Despite Burry's criticism, Palantir has delivered impressive performance, with 93% revenue expansion year-over-year in its latest quarter and operating cash flow more than doubling to $2.1 billion during the first six months.