Michael Burry, the investor renowned for his early recognition of market vulnerabilities, has released a new analysis implying substantial downside risk for Palantir Technologies Inc. (NASDAQ: PLTR). Using technical charting methods, Burry highlighted a "Head and Shoulders" pattern in Palantir's recent stock price movements, a classical chart formation frequently interpreted as a predictor of bearish reversals in the market.
In an update shared via the social media platform X on February 10, Burry posted a chart mapping out the distinct "Left Shoulder," "Head," and "Right Shoulder" phases on Palantir's price graph. He accompanied this technical illustration with the note, "I am working on something $PLTR," signaling ongoing focus on the stock's trajectory.
The analysis outlines two critical price points: the "Next Support" zone around $80 and a deeper "Landing Area" estimated between $50 and $60 per share. With Palantir's stock trading at approximately $142.91 as of the latest session, Burry's forecast suggests the possibility of a nearly 58% decline should the pattern fully materialize.
This technical outlook complements Burry's earlier expressed doubts about the sustainable valuation of AI-related companies. Previously, in November of the preceding year, he detailed a significant options transaction betting on Palantir's stock falling to or below $50 by 2027. Specifically, he stated, "So, I bought 50,000 of these things for $1.84… Each of those doodads let me sell $PLTR at $50 in 2027." This statement reveals a deliberate positioning to profit from a significant price decrease over the coming years.
Over the past year, Burry has characterized certain technology stocks he targets for short positions as "frauds of the modern era." This critical perspective is reinforced by his recent decision to close his hedge fund, Scion Asset Management. In correspondence to his investors, he explained that the fund's liquidation was a response to a market environment that did not align with his investment hypotheses. He expressed, "With a heavy heart, I will liquidate the funds and return capital… by year’s end," revealing his intent to exit active fund management amid current market conditions.
Despite this bearish outlook, Palantir's CEO Alex Karp has publicly dismissed Burry's short-selling activities as "BatS—t Crazy," underscoring a stark contrast in views regarding the company's future. Nonetheless, Burry's most recent technical analysis implies that the perceived "AI bubble," frequently referenced in his commentary, may be deteriorating structurally, independent of Palantir's recent financial performance.
According to data from Benzinga’s Edge Stock Rankings, Palantir exhibits a negative trajectory over short, medium, and long-term price trend analyses, coupled with a notably poor value ranking. These measures further affirm concerns about the stock's current valuation and its ability to sustain recent price levels.
Examining Palantir's trading performance in 2026 shows a mixed picture. Year-to-date, the stock price has dropped by approximately 19.60%, contrasting with a modest gain of 0.25% for the Nasdaq 100 during the same span. Palantir shares have fallen 23.56% over the preceding six months, though still up nearly 29% relative to the same point one year ago.
On the most recent trading day referenced, Palantir’s shares ended 5.16% higher at $142.91 and gained an additional 1.02% in after-hours trading. Despite these short-term gains, skepticism remains due to the technical and fundamental analysis signaling potential for a substantial correction.
As the market continues to evaluate Palantir’s prospects, investors are reminded of the inherent risks in holding stocks within highly speculative and rapidly evolving sectors such as artificial intelligence. The pattern identified by Burry, combined with his existing positions and commentary, provides a cautionary framework for those considering exposure to Palantir.