Treasury yield drop may signal deeper AI credit risks
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Palantir stock rose 8% on Thursday after announcing an expanded strategic alliance with PwC, even as Michael Burry reiterated his bearish view on the company.
Shares of Palantir Technologies gained about 8% on Thursday, climbing back from a nearly 6% drop in the prior session and trading around $183.
The advance occurred despite a fresh round of criticism from well-known short seller Michael Burry, who famously featured in 'The Big Short,' as he repeated his longstanding negative outlook on the firm.
In a lengthy post on X on Thursday morning, Burry restated that Palantir is again at inflated levels and that the underlying facts remain unchanged. He called the company a consultancy benefiting from an AI frenzy driven by fear of missing out and cautioned that its market capitalisation could ultimately sink far below $100 billion.
Burry highlighted accounts receivable data, pointing out that receivables increased more quickly than revenue in nine of the past 12 quarters and that a single customer represented roughly a quarter of receivables yet generated under 10% of revenue.
He additionally drew attention to rising days sales outstanding, a deferred revenue structure similar to that of consulting companies such as Accenture instead of typical SaaS businesses, high stock-based compensation, and substantial net operating losses. Burry revealed that he continues to hold a short position in the stock and owns put options.
ââŠAny way I slice it, Palantir is losing either bargaining power or it is channel stuffing, or both. The former is a weak business position, and the latter a crime. Do not laugh. That latter possibility is actually not so far out there. The pattern supports potential channel stuffing, perhaps even more than a loss of bargaining position, and again they are not mutually exclusiveâŠ,â Michael Burry said on X.
Investors mostly looked past the notable critique. The main driver of the strong rebound was the unveiling of an expanded strategic partnership between Palantir and PwC US.
The agreement brings together Palantirâs Foundry and AI Platform with PwCâs sector knowledge, engineering skills, and managed services offering.
Central to the deal is an AI-native platform for transactions, which aims to complete deals as much as 50% more quickly and cut one-off costs by as much as 45%.
The stock maintained its gains into the closing bell. PLTR ended the trading day at $183.03, a rise of 8.01% or $13.57 from the prior close of $169.46, based on TradingView figures.
Looking at broader periods, the stock has lost 1.36% in the last five trading days but is still up 25.69% for the month and 21.27% over the past six months. On a year-to-date basis, shares are slightly positive at a gain of 0.63%, a sharp contrast to the near-flat performance seen only a few weeks ago.
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Despite a sharp fall in Treasury yields, stocks have been battered. Rising CDS spreads for AI players like CoreWeave and Oracle suggest investors are worryingâŠ
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