To The Moon

Whether $Palantir Technologies Inc.(PLTR)$ bounces from its current range or heads to new lows depends on a mix of its fundamentals, investor sentiment, and broader market conditions — especially how people are thinking about AI right now.

In this article, I would like to walk through both the bull and bear cases, then my view and some scenarios to watch.

What’s Going On with Palantir Right Now

Strengths / Bull Case

Very Strong Growth

• Palantir’s Q3 2025 revenue came in at $1.18B, up 63% YoY.

• Adjusted operating margin is very high (reported ~51%) per Fintool.

• It is generating strong free cash flow.

• Its "Rule of 40" (growth + profitability) is very favorable.

Enterprise AI Demand

• The U.S. commercial business is accelerating: in Q3, U.S. commercial revenue reportedly jumped 121% YoY.

• Total Contract Value (TCV) bookings are strong, indicating forward demand.

• They are positioning themselves as a key AI infrastructure / data-platform company, not just a defense contractor.

Government Exposure

• They still have a big piece of business from U.S. government contracts, which helps with cash flow visibility.

• For example, some very large defense contracts are “sticky” in nature (long term).

Raised Guidance

• Palantir raised its Q4 2025 revenue outlook to $1.327–$1.331B, suggesting management expects continued strong demand.

• Full-year 2025 revenue guidance was also raised.

Risks / Bear Case

Valuation Is Extremely Rich

• Some analysts argue that Palantir is “richly valued,” and even with strong growth, the current multiples may be hard to justify long term.

• According to Wedbush, after the earnings-driven rally, investor concerns over the “extreme valuation” resurfaced.

• Forbes argues that it may be “overvalued by ~74%.”

• Other bear-case valuation models suggest very conservative intrinsic value (e.g., much lower than current price) under decelerated growth assumptions.

AI Bubble Risk / Sentiment Risk

• The very high valuation is partly justified by bullish AI narrative; if the AI trade weakens, Palantir could be vulnerable.

• Michael Burry (famously contrarian) taking large put positions adds to sentiment risk.

• Some argue that enterprise AI adoption may not deliver ROI fast enough or that customers might be more cautious.

Concentration Risk

• While commercial is ramping, a large portion of its business still comes from government contracts.

• If government spending slows (e.g., due to policy risk, budget cuts), that could hurt future revenue.

International Growth Is Lagging

• According to earlier reporting, Palantir’s growth outside the U.S. (especially commercial) is not keeping pace.

• That limits how broadly they can scale.

Profit-Taking Risk / “Sell the News”

• After the Q3 earnings, despite strong results, Palantir’s stock dropped — likely because investors used the earnings as an opportunity to realize gains.

• This suggests that some of the rally was already “priced in,” and upside could be more limited from here on strong results alone.

What Could Happen Next

Given the above, I think both outcomes are plausible — a rebound is possible, but not guaranteed, and there is significant downside risk if sentiment turns.

Here are a few scenarios I think are most likely, and what would drive them:

Moderate Rebound / Range-Bound Rally

• If Palantir continues to deliver strong quarterly results and raise its guidance, it could re-test higher levels (or at least bounce).

• However, given valuation concerns, I do not necessarily see a “blow-off” rally unless the broader AI euphoria returns.

• In this scenario, PLTR trades in a higher base, but growth needs continual proof.

Volatility / Pullback

• If the market gets skittish about AI valuations again, or if big names like Burry keep pushing bearish bets, PLTR could test lower support.

• A few weak quarters, or any miss in bookings / TCV could trigger more aggressive selling.

• Macro risk (higher rates, slower tech spending) could exacerbate downside.

Long-Term Growth Play

• If Palantir can scale its commercial AI business meaningfully (especially outside the U.S.), it could justify a premium valuation over time.

• Its strong cash flow, high margins, and contract pipeline give it a real shot at being a “platform play” rather than just a hype name.

• For long-term investors who believe in its AI + data mission, this could be a core holding — but only if you are willing to ride through volatility.

The Edge-Case Concern (Tail Risk)

One of the bigger worries: what if the AI bubble really cools down or if capital reflows away from high-growth tech? In that case, Palantir’s valuation could compress significantly, even if its business is still solid.

Another risk is competitive: more companies are building similar AI/data platforms. If Palantir does not continue to innovate, its growth could slow.

Also, while government contracts are stable, they are subject to political and budget risk.

Bottom Line: Will PLTR Rebound or Make New Lows?

Yes, a rebound is quite possible, especially given its strong recent earnings and raised guidance.

But the path forward is risky: the valuation is already very lofty, and if sentiment shifts, those multiples could unwind quickly.

Another new low is not my base case, but it's very much in the realm of possibility if growth disappoints or the AI trade weakens materially.

If you are like me who believed in the long-term AI potential of Palantir, we might consider a partial scaling-in approach: buying some on weakness, but not going “all in” right now, given the valuation risk.

In the next section, I would like to look at the sensitivity / scenario model. Building a sensitivity / scenario model for Palantir (PLTR) is very useful, especially given how much is riding on AI growth and how “rich” sentiment looks.

Here we lay out three scenarios — bull, base, and bear — with assumptions for revenue growth, margins, and valuation. And we will also show implied valuations / share prices under those. (These are not price targets, but “what-if” scenarios.)

Key Inputs & Assumptions

First, allow me to summarize some of the data we can build off:

• In Q3 2025, Palantir reported $1.181 B in revenue, which is +63% YoY.

• They raised full-year 2025 revenue guidance to $4.396–4.400 B.

• Adjusted operating margin in Q3 was ~51%.

• According to Trefis, their historical revenue growth (2023–2024) was ~28.8%.

• According to TipRanks, they are generating strong free cash flow; growth + cash flow strength has made some call it a “free cash flow powerhouse.”

• Valuation concern: per Trefis, PLTR trades at very high multiples (Trefis suggests ~ 66× revenues for some forward-year basis).

Scenario Assumptions

Here are the assumptions we use for each scenario. These are hypothetical but grounded in recent performance + potential risks.

Rationale for Assumptions:

• Bull case: Uses very strong growth consistent with AI demand + Palantir continuing to capture a large part of its TAM, high margin structure holds, FCF stays very strong.

• Base case: Moderated to reflect potential deceleration, but still robust growth; Palantir sustains good profitability but doesn’t quite push margins to extremes.

• Bear case: Growth slows significantly (market cooling, execution risk); margin compresses; multiples compress due to valuation risk.

Projected Financials and Valuation (Simplified)

To make this tractable, we run a 5-year forward projection (simplified) and then value using a revenue multiple (EV/Rev), then convert to implied share price.

Step 1: Project Revenue (5-year simplified)

Assume current revenue base = US$ 4.40 B (mid-2025 guidance).

Bull:

• Year 1: 4.40 × 1.60 = 7.04 B

• Year 2: 7.04 × 1.60 = 11.26 B

• Year 3: 11.26 × 1.60 = 18.02 B

• Year 4: slow to +30% → 18.02 × 1.30 = 23.43 B

• Year 5: +30% → ~ 30.46 B

Base:

• Y1: 4.40 × 1.40 = 6.16 B

• Y2: 6.16 × 1.40 = 8.62 B

• Y3: 8.62 × 1.40 = 12.07 B

• Y4: slow to +25% → ~ 15.09 B

• Y5: +25% → ~ 18.86 B

Bear:

• Y1: 4.40 × 1.25 = 5.50 B

• Y2: 5.50 × 1.25 = 6.88 B

• Y3: 6.88 × 1.25 = 8.60 B

• Y4: slow to +15% → ~ 9.89 B

• Y5: +15% → ~ 11.37 B

Step 2: Estimate Terminal EV (Using Multiple)

Using the Year 5 revenue as a “run-rate” proxy and applying the multiple:

• Bull: 30.46 B × 50× = US$1,523 B (Enterprise Value)

• Base: 18.86 B × 30× = US$566 B

• Bear: 11.37 B × 15× = US$170.6 B

Step 3: Implied Share Price (Very Rough)

To convert EV to equity value, we need a rough net cash or debt adjustment. For simplicity, assume net cash = US$5 B (Palantir has a strong cash balance / marketable securities per their filings). This is illustrative.

Bull: Equity value ≈ 1,523 B – 5 B = ~1,518 B → Divide by shares outstanding. Palantir’s shares outstanding is ~ 5.9 B shares (approx; you’d need the exact figure for more precision). That gives ~ US$257 / share.

Base: 566 B – 5 = 561 B → / 5.9 B = ~ US$95 / share.

Bear: 170.6 B – 5 = 165.6 B → / 5.9 B = ~ US$28 / share.

Interpretation of the Scenarios

Bull (~US$257): In a very optimistic but not completely unrealistic AI-supergrowth world, Palantir could be much higher from here if growth continues at a blistering pace and margins remain very strong.

Base (~US$95): This seems like a “realistic but not sky-high” scenario, assuming growth is strong but moderates, and valuation multiples compress from peak optimism.

Bear (~US$28): A very bearish case — if growth slows heavily, margins drop, and investors demand much lower multiples, there’s substantial downside from current.

Key Risks That Could Make These Projections Deviate

Growth deceleration due to weaker-than-expected AI adoption.

Margin compression if Palantir has to invest more (or if operating leverage doesn’t scale as hoped).

Multiple risk: Even in a strong growth scenario, if sentiment shifts, PLTR’s multiple could compress.

Execution risk: Sales, product, competition risk.

Macro / policy risk: Government contract risk, budget cuts, macro slowdown.

Cash burn or weakening free cash flow if assumptions do not pan out.

Here Is The View (Based on This Model)

The base case (~US$95) seems plausible if Palantir delivers continued good growth but not “explosive forever” growth — this could be a reasonable long-term target for a disciplined investor.

The bull case is attractive, but you'd need to be very confident in Palantir’s ability to scale its AI platform aggressively and maintain high margins.

The bear case is not my highest-probability scenario, but it's absolutely in the realm of possibility if the AI trade cools or execution stumbles.

To further support the above, we have also run a 5-year DCF with Gordon-growth terminal value for Bull / Base / Bear scenarios and displayed the results and full projection tables.

PLTR DCF Summary — enterprise value, equity value, implied share price and PV breakdown for each scenario.

PLTR Projection — Bull / Base / Bear — year-by-year revenue, FCF margin, FCF and PV of FCF for Years 1–5 for each scenario.

🐻 Bear Case Projection (The "Burry" Scenario)

Thesis: AI spending cools off, competition erodes pricing power.

• WACC: 11.0%

⚖️ Base Case Projection (Current Market Expectation)

Thesis: Palantir remains a leader, growing steadily as the "Operating System for AI."

• WACC: 10.0%

🐂 Bull Case Projection (AI Supercycle)

Thesis: Mass adoption of AIP; Palantir becomes the dominant default software for US Enterprise.

• WACC: 9.0%

Quick takeaway from the model (numbers rounded):

Bull — Implied equity value ≈ US$220.7B, implied price ≈ US$92.7 per share.

Base — Implied equity value ≈ US$70.4B, implied price ≈ US$29.6 per share.

Bear — Implied equity value ≈ US$25.4B, implied price ≈ US$10.7 per share.

(Those implied prices come from: enterprise value from the DCF + cash & short-term investments of US$6.4B, divided by 2.38B shares outstanding — sources and figures used are Q3 2025 guidance / filings and market data.)

Notes, caveats, and how we can tweak this:

Inputs we used (from Q3 2025 filings and market pages): revenue base US$4.40B, starting FCF ~US$1.10B, cash & short-term securities US$6.4B, shares outstanding 2.38B. If you want different starting values (e.g., using a different FCF baseline, or an updated share count).

Key levers that move implied price a lot: revenue growth rates (years 1–3), terminal growth rate, and discount rate (WACC). Changing margins (FCF margin path) also matters.

This is an illustrative DCF; it assumes no debt, linear margin change, and uses Gordon growth for terminal value. Real DCFs can add: explicit capex / working capital profiles, tax rate, separate operating cashflow modeling, or use an exit multiple instead of Gordon growth.

Summary

Here is how we can summarize the current situation with Palantir (PLTR) as of late November 2025, addressing the questions about Michael Burry's position and the stock's future outlook.

The Situation: Burry vs. The Bulls

Palantir has been trading range-bound around the $160 level following a correction from its recent highs of ~$207. The stock is currently caught in a tug-of-war between strong business fundamentals and high-profile bearish sentiment.

The "Big Short" Bet: Michael Burry (Scion Asset Management) did disclose a significant bearish position via put options against Palantir and Nvidia in late 2025. His thesis rests on the idea of an "AI Bubble," specifically questioning whether the massive spending on AI infrastructure (CapEx) can generate sustainable profits and criticizing how tech companies account for hardware depreciation.

The Decline: Since this disclosure and amid broader valuation concerns, PLTR stock has corrected ~20-22%, retreating to the $155–$165 range. Insider selling by CEO Alex Karp has further fueled uncertainty.

Outlook: Rebound or New Lows?

The market is currently split on PLTR’s next move:

The Bear Case (Risk of New Lows): If Burry’s "AI Bubble" theory gains traction or if macroeconomic conditions worsen (e.g., inflation/rates), PLTR’s premium valuation (trading at massive multiples) makes it vulnerable. A break below the $150 support level could signal a deeper decline toward $130.

The Bull Case (Potential Rebound): Despite the stock price drop, Palantir’s underlying business remains robust. The company recently posted a "Rule of 40" score above 110 (a key metric of growth + profit), and revenue growth remains over 50%. Bulls argue this is a healthy consolidation before a move back toward $180-$200, driven by continued commercial AI adoption.

The stock is likely to remain volatile in the near term. A "rebound" depends on Palantir proving that its commercial AI revenue can outpace the "bubble" fears. For now, the $155 level is the critical floor to watch.

Appreciate if you could share your thoughts in the comment section whether you think PLTR have a good chance for a “rebound” by riding on its strong free cash flow strength while less focus on its valuation concerns.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.