Stock Market About to Fall? Here's How to Prepare
In a Nutshell
Michael Burry shorted Palantir at peak valuations of 200-250x earnings, and the stock has since fallen 48% to $107 while still trading at a 112x PE—far above Apple, Nvidia, and Microsoft. Market sentiment has rotated away from Palantir toward AI and semiconductor stocks, leaving high-multiple names vulnerable if broader markets weaken. MicroStrategy has plunged 71-78% as Bitcoin fell, and investors are advised to cut leverage and manage risk aggressively amid volatile, uncertain conditions.
These notes were generated by AI and may contain inaccuracies.
Michael Burry, known for The Big Short housing bubble prediction, disclosed a short position on Palantir in November 2025 when the stock traded at highs of $200. Alex Karp, Palantir CEO, publicly criticized short sellers and called Burry batshit crazy for shorting the stock. Burry is rumored to have closed a portion of his short position that was reportedly valued at $912 million.
Palantir has since dropped from $207 to $107, representing a 48% loss from overall highs. The stock is among the worst performing stocks of 2026. Investors who bought in late 2025 entered at one of the worst times for the company.
Even after the selloff, analyst fair value estimates suggest additional downside remains. Palantir trades at a 112x PE ratio despite losing nearly 50% of its value. At its peak of $200-$250, the stock traded at a 200-250x PE ratio.
For comparison, Apple trades at 33x earnings after a sharp correction, Nvidia at 29x, and Microsoft at 20.9x. Meta trades at 19.5x. These established companies trade in the traditional 20-30x earnings range, making Palantir's 112x multiple appear significantly overvalued even after the correction.
Alex Karp encouraged investment at $207-$250 per share when the stock traded at 200-250x earnings. The speaker notes the contrast between Karp calling Burry crazy for shorting an overvalued company versus encouraging investors to buy at extreme multiples.
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