Burry’s Massive Puts vs. a Street‑High $255 Target From Bank of America – Who Should You Follow?

Core Viewpoint - Michael Burry is bearish on Palantir (NASDAQ:PLTR), believing the stock is overvalued, while bulls argue for its extraordinary growth potential and valuation [1][2]. Group 1: Analyst Ratings and Price Targets - Most analysts have a "Hold" rating on PLTR, with three analysts rating it as "Sell" and four as "Strong Buy" [1]. - Bank of America has set the highest price target for PLTR at $255 [1][6]. Group 2: Valuation Concerns - PLTR stock trades at 156 times trailing sales and 552 times trailing earnings, with a forward P/E ratio of 175 times next year's expected earnings, marking an unprecedented valuation since the Dot Com era [2][6]. - Burry's bearish thesis is primarily based on these high valuation metrics [2]. Group 3: Burry's Position - Burry holds put options on approximately 5 million shares of Palantir, with a notional value of around $912 million, representing 66% of his reported holdings [3]. - He purchased $9.2 million worth of put options at a strike price of $50, expiring in 2027, betting that PLTR stock will decline below this price [4][6]. Group 4: Company Growth and Financials - Palantir has a free cash flow margin of nearly 50%, with full-year free cash flow estimated at $2.1 billion, indicating strong financial health [5][6]. - The company's growth is attributed to its successful penetration into various companies and agencies, which bulls argue justifies its high valuation [5].