Michael Burry Sees More Trouble Ahead For PLTR Stock: Wall Street And Retail Traders Still Don't Care

• Despite strong earnings and a boost from the U.S-Iran war, Palantir shares have underperformed in recent months.
• Burry said PLTR’s ‘head and shoulder top’ stock pattern “reflects the waxing and waning of extremely bullish psychology.”
• Palantir is set to hold its annual shareholder meeting on Wednesday.

Palantir shares dropped 2% in overnight trading ahead of Wednesday, after a 5.3% slide the previous day, and ace investor Michael Burry believes they might fall further.

After a stellar run last year, fueled by consistently strong quarterly results, Palantir’s stock has lost momentum in 2026. While the company’s strong positioning in the defense sector and exposure to the ongoing U.S.-Iran conflict provided some support, PLTR has largely been swept up in the broader selloff across software stocks. 

Palantir shares are down 14% year-to-date, with investors now looking to Wednesday’s annual shareholder meeting for fresh catalysts and clues about the company’s outlook. The Florida-based data analytics firm reported first-quarter revenue and profit above expectations and raised its full-year forecasts on May 4, but shares dropped in the days that followed.

Burry Remains Short On PLTR

Meanwhile, Burry, who has held a short position in the stock since late last year, said on Tuesday that his view remains unchanged. “Palantir’s chart shows the price is at a crossroads after a head-and-shoulders-type top. This reflects the waxing and waning of extremely bullish psychology,” he said in a new blog post on his Substack page.

A head-and-shoulders top forms after a strong rally when buyers gradually lose momentum. If the stock breaks below the pattern’s “neckline” support level, technical traders often view it as a sell signal that could indicate a larger decline.

Burry essentially means Palantir’s investor enthusiasm may be cooling, but the stock is still at a make-or-break level where either a bearish reversal or a renewed uptrend could emerge.

Analyst, Retail View On PLTR

Burry’s view diverges from the consensus view on Wall Street. Currently, 19 of 31 analysts recommend ‘Buy’ or higher on PLTR, while 10 recommend ‘Hold,’ and two rate it ‘Sell’ or lower, according to Koyfin. Their average price target of $183.73 implies a 21% upside from the stock’s last close.

On Stocktwits, retail sentiment for PLTR has risen this week and was ‘bullish’ early Wednesday, partly due to a rotation back into software shares over the past month.

“$PLTR everyone (is) selling this and jumping into MRVL lol,” said a trader, referring to the sharp gains in Marvell Technologies and other chip stocks. Another wrote: “$PLTR Nice consolidation, back to 165 by Friday.”

Other traders believe Palantir continues to enjoy a dominant position in AI. “$PLTR So many trash tickers get tagged here claiming they’re the next Palantir. There’s only one Palantir,” one said.

PLTR stock gained 12.5% in May, while the iShares Expanded Tech-Software Sector ETF (IGV) rallied over 20%.

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