Palantir Drops After Anthropic Warning—Bull Case Remains Intact

Key Points

• Palantir stock dropped after Michael Burry warned that Anthropic’s rapid growth could threaten the company’s long-term outlook.
• Despite concerns, Palantir’s enterprise deployment model and deep government ties differentiate it from AI model builders like Anthropic.
• Analysts maintain bullish price targets, suggesting significant upside even as valuation concerns and volatility persist.

Palantir Technologies Inc. NASDAQ: PLTR may be proof that there’s no such thing as bad publicity. The stock sold off sharply on April 9. The reason of the day was that Michael Burry, who had taken out millions in put options on PLTR earlier this year, was back at it. This time, Burry alleged that Anthropic is “eating Palantir’s lunch.” 

Here’s the background. Anthropic posted an impressive jump in annual recurring revenue (ARR) from $9 billion to $30 billion in a matter of months.

Burry’s conjecture is that it took Palantir 20 years to get to $5 billion in ARR, and that businesses will choose Anthropic’s cheaper, more intuitive solution. That would leave Palantir with its relatively low-margin government business.  

Like many things, at the surface level, the bear case makes sense.

Palantir will need years of outperformance to justify its current valuation. If Anthropic threatens that growth, it would be problematic at best.  

Anthropic Vs. Palantir: Why the Comparison May Miss the Mark 

But the operative word is “if.” And when you look at the business models of each company, the case gets much shakier. Simply put, Anthropic and Palantir are only the same in that they both are artificial intelligence (AI) companies. But whereas Anthropic builds AI models, Palantir enables other companies to deploy them at scale.  

Enterprise customers are choosing Palantir because they are working with sensitive data, and the stakes are massive. Those companies aren’t looking for cheap and easy. That’s why, as Wedbush’s Dan Ives has frequently remarked, Palantir is the first call many of these companies make.  

Geopolitical Catalysts Highlight Palantir’s Strategic Value 

The world can be grateful that a ceasefire was announced between the United States and Iran. However, in the 24 hours leading up to that announcement, PLTR jumped to over $150 per share.  

The reason was simple. Palantir’s technology has been proven to be effective in the prosecution of the air campaign against Iran. That was supported by a social media post from President Trump on April 10 praising the "war fighting capabilities and equipment" of the company.

If that campaign were to continue, it would be bullish for PLTR. Underscoring that point, PLTR was up over 4% in early trading on April 13 after the news that talks between the two countries broke down.  

That’s a real-world example of Palantir’s business model. And while it doesn’t necessarily refute Burry’s argument, it illustrates the difference between Palantir and Anthropic. Palantir is entrenched within the U.S. Department of War. That relationship isn’t going to change anytime soon. There’s more than an economic cost of switching; it’s about protecting the lives of U.S. service members.  

Liquidity, Volatility, and the Real Reason Behind the Sell-Off 

So, there’s Michael Burry’s assertion against geopolitical concerns. That sets up the reality that this has been a liquidity event. Investors have been looking for ways to access cash quickly. That means selling shares of stocks that are highly liquid. And that means PLTR.  

It’s frustrating for investors, and even more so for traders. But it doesn’t change the long-term outlook for the company or the stock. It just reiterates that this is a volatile stock that will be prone to outsized moves in both directions.  

Speaking of timing, it’s worth noting that Burry, as is his habit, took down his social media post shortly after it was posted. Yet, the assertion made is still being given as a reason for the stock to move lower.  

Analyst Price Targets Undermine Valuation Concerns 

The most logical bearish argument against Palantir has to do with valuation. Even after a correction of over 25% in the three months ending April 10, PLTR is still valued at over 200x earnings and over 70x sales.  

Using the efficient market hypothesis, those numbers mean that Palantir will have to continue delivering blockbuster results for years to come. 

But markets aren’t efficient, and in the case of PLTR, institutional investors were late to arrive, but now have little choice but to play catch-up. In recent years, institutional buying in terms of dollars has outpaced selling by nearly 3:1.  

Analysts agree. For all the concerns over valuation, the consensus price target for PLTR is $197.77. That’s a gain of nearly 50% from where the stock trades as of this writing. Wedbush reiterated its Outperform rating on PLTR as well as its $220 price target. That's more than 10% above the consensus target. 

Skeptics could make the counterpoint that only about 45% of Palantir stock is owned by institutions. That hasn’t moved much in the last year despite the stock’s inclusion in the S&P 500 and the NASDAQ 100. And with PLTR down about 25% in 2026, that stance could be justified.  

However, the stock appears to have found support around $130. The ceiling may remain low, and with so much uncertainty in the market, PLTR could drop further. But if you can handle the volatility inherent in the stock, this could be an entry point for starting a position.