Michael Burry Says Palantir's Books Look More Like a Consultant's Than a Software Company's

Key Points Palantir's accounts receivable reached $1.49 billion at the end of June, up from $1.04 billion at the end of 2025. One customer represented 27% of those receivables, while no customer accounted for more than 10% of revenue. Deferred revenue equaled about 32% of second-quarter revenue, closer to Accenture's ratio than to a typical software company's. 10 stocks we like better than Palantir Technologies › Michael Burry is going after Palantir Technologies (NASDAQ:PLTR) again. The investor of The Big Short fame laid out an accounting case against the artificial intelligence (AI) software specialist in a February post titled "Palantir: An Accounting." This week he pressed the case again, arguing that Palantir's financial profile looks more like a consulting firm's than a software platform's. He says a company valued around $420 billion today could eventually be worth less than $100 billion. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » He has had money behind the view. His Scion Asset Management disclosed put options on 5 million Palantir shares last fall. That was its final filing before he wound the fund down, and he told subscribers in April that he still holds Palantir puts. Palantir stock, meanwhile, fell almost 6% on Wednesday, jumped 7.7% on Thursday (the same day the company and consulting giant PwC announced an expanded enterprise AI alliance), and traded near $174 as of this writing, down more than 4%. Burry's case rests on numbers in Palantir's own filings, so that is where I checked it. Image source: Getty Images. The receivables are growing faster than sales In nine of the last 12 quarters, Burry wrote in February, Palantir's accounts receivable (the money customers owe for work already billed) grew faster than its revenue . He argued that a pattern like that can point to channel stuffing, aggressive revenue recognition, or payment terms stretched to win deals. The newest numbers don't break the pattern. Receivables stood at $1.49 billion at the end of June, up from $1.04 billion at the end of 2025 -- 43% growth in six months, against 38% growth in quarterly revenue over the same stretch. And the build is speeding up. It cut $434 million from operating cash flow in the first half, versus $164 million a year earlier. Notably, Palantir itself offers an explanation. The company says in its June-quarter filing that it has been shifting away from collecting several years of payments up front and toward billing annually or even in arrears, meaning after the work is done. That is a legitimate business choice. It is also exactly how a consulting firm gets paid. One customer owes about $400 million The filing also discloses that a single customer, identified only as Customer I, represented 27% of receivables at the end of June, up from 25% at the end of 2025. That works out to roughly $400 million owed by one customer. However, no customer accounted for more than 10% of revenue in the first half -- about $357 million at most. In other words, one customer appears to owe Palantir more than it could have recognized in revenue from any customer all half. That isn't proof of anything improper. A large government-related account may simply pay slowly, or billing may run ahead of schedule. But it is an unusual shape for a software company, with revenue spread across many customers and collection risk concentrated in one. Does Palantir collect like a consultant? Burry's sharpest comparison is a ratio. A subscription software company typically bills customers up front, so cash arrives before the revenue does and piles up on the balance sheet as deferred revenue. A consulting firm earns the revenue first and collects later. Salesforce , for example, carried $18.8 billion of unearned revenue in its most recent quarter -- more than one and a half times its $11.3 billion of quarterly revenue. At Accenture (NYSE:ACN) , the consulting giant Burry measures Palantir against, deferred revenue of about $7.6 billion amounts to around 40% of quarterly revenue. Palantir's deferred revenue of about $613 million comes to 32% of its $1.94 billion in second-quarter revenue, effectively the ratio Burry cites. Add the $453 million of customer deposits Palantir groups with it as contract liabilities, and the figure is still only about 55%. On either basis, Palantir collects like Accenture, not like Salesforce. Of course, the rest of the filing hardly describes a company in trouble. Revenue grew 93% year over year in the second quarter, and operating cash flow more than doubled in the first half, to $2.1 billion. Customers are paying. They are just paying later, and in a more concentrated way, than software investors might assume. And that, I think, is where Burry's argument lands hardest. It isn't an accusation of fraud. Every number he cites is disclosed. It is a reclassification argument: If Palantir earns its revenue the way a consultant does, the stock may not deserve a software valuation . At about 150 times earnings , shares have a long way to fall if the market ever agrees with him. His sub-$100 billion scenario is more than 75% below today's value. I was on the sidelines at this valuation before Burry wrote a word, and the second-quarter filing doesn't move me off them. Should you buy stock in Palantir Technologies right now? Before you buy stock in Palantir Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palantir Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $421,997 !* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,413,876 !* Now, it’s worth noting Stock Advisor’s total average return is 978 % — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor , and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of September 5, 2026. Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Accenture Plc, Palantir Technologies, and Salesforce. The Motley Fool recommends the following options: long January 2028 $260 calls on Accenture Plc and short January 2028 $280 calls on Accenture Plc. The Motley Fool has a disclosure policy .

Palantir's accounts receivable reached $1.49 billion at the end of June, up from $1.04 billion at the end of 2025.

One customer represented 27% of those receivables, while no customer accounted for more than 10% of revenue.

Deferred revenue equaled about 32% of second-quarter revenue, closer to Accenture's ratio than to a typical software company's.

Michael Burry is going after Palantir Technologies (NASDAQ:PLTR) again. The investor of The Big Short fame laid out an accounting case against the artificial intelligence (AI) software specialist in a February post titled "Palantir: An Accounting."

This week he pressed the case again, arguing that Palantir's financial profile looks more like a consulting firm's than a software platform's. He says a company valued around $420 billion today could eventually be worth less than $100 billion.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

He has had money behind the view. His Scion Asset Management disclosed put options on 5 million Palantir shares last fall. That was its final filing before he wound the fund down, and he told subscribers in April that he still holds Palantir puts.