One day later, Burry got some support from Jeffries' senior software analyst Brent Thill, who slapped Palantir with an "underweight" rating and a $70 price target (4) — implying roughly 46% downside from current levels — even after Palantir delivered 85% year-over-year revenue growth (5) in the quarter, its eleventh straight period of accelerating growth.
Burry noticed. "I saw Jefferies initiated with a price target of $70, and cited my thesis," he wrote in a Tuesday Substack post (6). "Well, the analyst did not cite me, but the words sounded familiar."
Why Jefferies says Palantir's valuation requires a 'heroic' assumption
In a CNBC interview (7) on Tuesday, Jeffries' Thill said his bearish call has nothing to do with Palantir's actual business performance. The fundamentals, he said, are "exceptional." The problem is what investors are paying for them.
Palantir's market cap sits around $330 billion. Thill estimates the company will produce roughly $12 billion in revenue next year — putting the stock at about 31 times expected 2027 revenue, according to his note. Justifying that multiple, he wrote, requires a "heroic durability assumption."
Thill compared Palantir to two other software darlings whose nosebleed multiples eventually collapsed.
"We watched Snowflake (8) at 50 times revenue go to 7. We watched Datadog (9) go from 30, 40 times to, you know, massively lower," he told CNBC. By contrast, Amazon (10) and Alphabet currently trade at roughly 12 to 18 times EBITDA — a fraction of what Palantir bulls are paying.
That valuation gap helps explain why Palantir is down about 20% year to date even as Amazon has gained 20% over the same stretch, Thill noted. "PLTR has now delivered 11 consecutive quarters of growth acceleration, which is impressive but also makes the setup increasingly difficult," he wrote in his note.
Palantir's Anthropic-sized problem
The other crack in the bull case, according to Thill, is competition — specifically a competitor that Palantir CEO Alex Karp (11) insists doesn't exist.
"If you look at Anthropic (12), they just raced by them," Thill said on CNBC. "If they do $12 billion next year, Anthropic's on a $40 billion run rate. You look at, and say, well, wait a minute, like, why aren't you investing in more salespeople? You're letting your margin go to 60, but there's no competition, but someone just passed you on the left side going 100 miles an hour."
