Palantir Technologies Inc. dropped in early trading amid worries over the company’s high valuation and the durability of the AI-driven rally, despite surpassing analyst expectations for third-quarter sales and raising its annual revenue forecast. Palantir’s shares fell as much as 8. 1% in premarket U. S. trading on Tuesday, coinciding with declines in broader stock market indices. Most Read from Bloomberg - Trump’s 90, 000-Square-Foot Ballroom Plan Puzzles the Experts - Boston’s South Station Gets a Towering Makeover - Colorado Ski Haven Asks Voters If It Can Borrow More for Housing - An International World Series Returns After 32 Years. How Toronto Is Owning The Moment - New York City Lashed by Strong Winds After Flooding Kills Two Adding to the concerns, hedge fund manager Michael Burry revealed bearish positions on Palantir and AI chip leader Nvidia Corp. Burry’s firm, Scion Asset Management, purchased Palantir put options, which gain value when the stock price falls, per the latest 13F regulatory filing. The stock had surged more than 170% this year through Monday, closing at a record high. As of Friday, Palantir’s price-to-sales ratio stood at 85, the highest within the S&P 500 Index. “All these numbers are completely detached from fundamentals, ” Gil Luria of D. A. Davidson told Bloomberg Television.

“This is a company with a $4 billion run rate growing 63%. There’s nothing remotely close to that, which is why the valuation has reached unprecedented levels. ” Mandeep Singh, a senior analyst at Bloomberg Intelligence, suggested that investors probably sought more forward-looking guidance for 2026. While Palantir provided a forecast for the current quarter, Singh noted, “I think everyone wanted some sense of 2026. ” The company reported a 63% revenue increase to $1. 18 billion for the quarter ending in September, beating the average analyst estimate of $1. 09 billion, according to a Monday statement. For the current quarter, sales are expected to reach approximately $1. 33 billion, above the consensus forecast of $1. 19 billion. Palantir has consecutively exceeded revenue estimates for 21 quarters, Bloomberg data shows. “We are in a nosebleed zone, ” said Palantir CEO Alex Karp in a Monday interview. “No one else is here. ” Burry, widely known for his successful bet against the mortgage market in the late 2000s that was portrayed in a movie, posted a cryptic caution to retail investors last week on X, warning about market excess. “Sometimes, we see bubbles, ” he wrote. “Sometimes, there is something to do about it. Sometimes, the only winning move is not to play. ”