Defense firm Palantir’s stock is down more than 9% in the two days since a better-than-expected earnings call Monday night — a slide that has the company’s boss on the offensive.
CEO Alex Karp fired back at analysts who have suggested companies like Palantir and others at the forefront of the development of artificial intelligence are overvalued.
In an interview Tuesday morning on CNBC, Mr. Karp, a multibillionaire who has run Palantir as CEO since 2003, challenged skeptical AI market and industry analysts, saying they were “trying to call the AI revolution into question.”
Palantir posted its “highest ever reported revenue growth rate of 63% year-over-year,” the company said, including large increases in the commercial sector.
Financial analyst Michael Burry — famous for his “Big Short” position on the housing market — shared this week that he was holding a short position on Palantir, in spite of those metrics, over concerns about a possible AI market bubble.
Mr. Burry’s hedge fund, Scion Asset Management, bought more than $1 billion in market options that allow the fund to profit when share prices decline, according to regulatory filings released Monday.
In a post on X the week before, Mr. Burry shared a screenshot from the film “Big Short,” in a scene where Christian Bale, who played Mr. Burry in the film, realised the housing bubble.
Mr. Karp, 58, brushed off the naysayers.
Palantir’s market value is driven by “working class” investment, he said, not by market professionals like Mr. Burry.
The company has been the fifth-best performing stock in the S&P 500 so far this year, and Mr. Karp’s remarks on the call hinted that he was prepared for the market response.
The long-time associate of Peter Thiel, his Palantir co-founder, said Monday night that the company is driven by “sane people that put up their own money and fight for us,” praising retail investors for their capital.
“We’re rocking along,” Mr. Karp said Monday night on the earnings call. “Please turn on the conventional television and see how unhappy those that didn’t invest in us are. Get some popcorn, they’re crying.”
Mr. Burry’s options not only included Palantir, but also the global chip manufacturer Nvidia.
The two companies announced a partnership last week for “a first-of-its-kind integrated technology stack for operational AI.”
Nvidia is the world’s highest valued company — the first company to ever achieve a market value of $5 trillion — whose increased value is largely driven by sales of the company’s hardware as AI is introduced into most industries.
“The two companies he’s shorting are the ones making all the money,” Mr. Karp said. “The idea that chips and ontology is what you want to short is b——— crazy.”
He said Mr. Burry’s market choices were tantamount to “market manipulation,” adding that Palantir “delivered the best results everyone, anyone’s ever seen.”
Palantir did not mention its new partnership with Nvidia on the call, but did tout the U.S. Army’s decision to move to “Vantage,” a Palantir platform, as its primary data host. Mr. Karp said the company “highly overvalues” the defense programs “in terms of our time and our energy.”
The company claims defense customers are making “cultural decisions” that will change the face of the military data infrastructure. “This directive will enable the Army to rapidly sunset legacy systems and enable more investment in the Army’s Future Force concept and systems,” they said on the call.
The challenge for investors on the defense front is that Palantir can “unfortunately, can only tell you one percent” of what the company is involved in. The claim by Mr. Karp is that Palantir’s programs are “crazy, crazy, important, and they’re not downstream of the problem, they are the problem and we’re reshaping them.”
Mr. Karp’s remarks weren’t without barbs — he launched into discussions of Palantir supporting Immigration and Customs Enforcement and the U.S., Ukraine and Israel not just as customers but as key elements of Palantir’s company culture.
“I don’t know why this is all controversial, but many people find that controversial,” Mr. Karp said.
