Michael Burry Challenges Palantir's Software Valuation

Investor Michael Burry, known for "The Big Short," has reiterated his skepticism regarding Palantir Technologies' (PLTR) accounting practices, drawing parallels to consulting firms rather than software companies. Burry suggested that Palantir, currently valued around $420 billion, could see its valuation fall below $100 billion.

Palantir's stock has experienced significant price swings, dropping nearly 6% on Wednesday and then surging 7.7% on Thursday. As of this writing, the stock traded near $174, down over 4% for the session. Burry's critique centers on the company's receivables, which stood at $1.49 billion at the end of June, an increase from $1.04 billion at the end of 2025. This represents a 43% growth in six months, compared to a 38% growth in quarterly revenue over the same period.

Further substantiating his concerns, Burry noted that Customer I represented 27% of receivables in late June, up from 25% previously. However, no single customer accounted for more than 10% of revenue in the first half of the year. Burry contrasted this with Accenture (ACN), a consulting firm where revenue growth was 93% year-over-year in the second quarter, with gross margins at 84.80% and receivables at $1.94 billion, constituting 32% of its revenue. Palantir's deferred revenue accounts for approximately 40% of its quarterly revenue, a figure Burry finds low compared to software company norms, stating it is only 55% on one basis. Despite these accounting observations, Palantir reported 93% year-over-year revenue growth in the second quarter.