Home / Business and Economy / Burry: Palantir Rides AI FOMO, Lacks Software Model
Burry: Palantir Rides AI FOMO, Lacks Software Model
12 Sep
Summary
- Burry argues Palantir's financial metrics resemble consulting, not software.
- He notes rapid accounts receivable growth and extended payment collection times.
- AI excitement may be temporarily boosting Palantir, similar to dot-com consultancies.
Michael Burry has voiced strong doubts about Palantir's business model, contending that the company operates more like a consultancy than a subscription software provider. He points to financial indicators such as accounts receivable growing faster than revenue and extended days sales outstanding (DSO), which increased from 35 days in 2020 to 66 days in 2025. Burry suggests this pattern is characteristic of firms delivering labor and expertise on an ongoing basis, rather than typical SaaS companies.
He believes the current surge in Artificial Intelligence adoption is driving companies to hire Palantir due to 'AI FOMO'. Burry draws parallels to the dot-com bubble, where internet consultancies like DiamondCluster and Razorfish saw temporary booms before ultimately failing. He suggests Palantir could face a similar fate if AI demand wanes, potentially impacting its market valuation.
Further concerns raised by Burry include Palantir's substantial stock-based compensation and significant net operating losses (NOLs), which he links to tax deductions from SBC. He also questioned the escalating expenses for the company's private aircraft. In contrast, Wedbush Securities' Dan Ives maintains a bullish outlook, forecasting Palantir to become a trillion-dollar company driven by its US commercial business and AI use cases.
