Big Short investor Michael Burry turns his sights on Palantir’s ‘sand castle’

As global markets reel from a chip-driven selloff, the outspoken investor targets Palantir’s valuation while doubling down on China’s tech giants.

The markets are currently watching a familiar figure cast a long shadow over the high-growth software sector. Michael Burry, the famed investor who rose to global prominence for his prescient "Big Short" call, is once again targeting Palantir. In a pointed post on X, Burry dismissed the stock as a "sand castle," highlighting that it has hit "new lower lows" after a lacklustre volume top. For those watching the ticker, the math is sobering: Palantir shares are down nearly 30% year-to-date, struggling to justify the premium valuations that once made them a darling of the sector.

The mechanics of the slide

This isn't just a matter of bearish sentiment; it is a reflection of a broader retreat from the software and artificial intelligence trade. The latest pressure on Palantir shares followed a volatile week where South Korean giants Samsung Electronics and SK Hynix saw double-digit percentage drops in their stock prices. While these chipmakers staged a partial recovery, the shockwaves were enough to shake investor confidence across U.S. and European markets. Burry’s critique is precise: he points out that trading volume for Palantir fell into the top and has failed to recover, suggesting a lack of conviction from buyers as the price continues to sag.

A tale of two portfolios

While Burry remains deeply sceptical of American software companies, his capital is moving in a different direction. Recent filings reveal that the investor has increased his position in Alibaba, viewing the Chinese titan as the most advanced player in the region’s AI strategy. By purchasing additional shares at $111.90, Burry is effectively betting that the value lies in markets that are currently out of favour, rather than in the inflated, hype-driven valuations he perceives in the U.S. tech space.

Why it matters

The divergence in Burry’s strategy offers a window into the current market mood. Investors are no longer blindly chasing growth; they are scrutinizing the fundamentals behind every software contract and platform adoption claim. The "sand castle" metaphor serves as a warning that without sustainable earnings to back up the hype, market rallies can vanish as quickly as they appear. As liquidity tightens and volatility returns, the premium on speculative tech is being reset, forcing fund managers to decide whether to stick with high-valuation incumbents or pivot toward the undervalued opportunities emerging in international markets like China.