President Donald Trump publicly praised Palantir Technologies (PLTR) on Truth Social Friday, highlighting the company's 'great war fighting capabilities and equipment' as its stock headed for a steep weekly decline [1][2]. Trump's endorsement came as Palantir's shares were trading around $127-$128, marking a 13-15% drop for the week and deepening its 2026 losses to approximately 28% [1][2]. The U.S. military is reportedly using Palantir's AI-powered Maven Smart System platform for target identification in the Middle East, tied to strikes on Iran that began in late February [1]. Palantir derives more than half of its U.S. revenue from government contracts, including the Pentagon and Immigration and Customs Enforcement [1][2].
Despite Trump's positive remarks, famed short-seller Michael Burry remains bearish on Palantir. Burry stated in a Substack post that he continues to hold long-dated put options, specifically the June 17, 2027 Strike Price 50 Puts and the December 19, 2026 Strike Price 100 Puts, and has been rolling his position since fall 2025 [2]. Burry believes Palantir's fundamental value is well under $50 per share, describing the stock as 'wildly overvalued' even after acknowledging the possibility of a near-term rally following Trump's post [1][2]. He noted that Trump's endorsement temporarily boosted the stock off its intraday lows, but the broader selloff in software stocks, exacerbated by concerns over new AI models like Anthropic's Mythos, continues to weigh on Palantir [1][2].
CEO Alex Karp has maintained regular engagement with the Trump administration, securing new government contracts and supporting military initiatives, despite previous critiques of Trump and donations to President Joe Biden's campaign [1][2]. Karp has also defended Palantir's controversial role in surveillance and its support for Israel, which has led to internal dissent and employee departures [1]. Palantir's ties to AI lab Anthropic, recently blacklisted by the Department of Defense, have raised additional concerns about the use of AI tools for autonomous weapons and surveillance. Karp stated last month that Palantir would 'phase out' Anthropic's models, but this has not yet occurred [1].
Burry also revealed an increased bearish position on Nvidia (NVDA), purchasing January 27 Strike 115 puts at 3.30, citing high implied volatility and a preference for limited maximum loss [2]. Last year, Burry's former hedge fund, Scion Asset Management, disclosed bearish positions against both Palantir and Nvidia, prompting a sharp reaction from Karp, who called Burry's wagers 'super weird' and 'bats--- crazy' [2].
CONCLUSION
Despite a brief rally following President Trump's endorsement, Palantir's stock remains under pressure, with a significant weekly decline and ongoing bearish sentiment from Michael Burry. The company's deepening ties to U.S. military operations and controversial AI partnerships continue to shape market perceptions. Overall, the event underscores heightened volatility and scrutiny for Palantir and related AI software stocks.