Shares of Palantir (NASDAQ:PLTR | PLTR Price Prediction) have been turbulently climbing back in the past month, and while the latest 7% slip in the face of what seems to be a Santa Claus slump, especially for tech stocks, investors might not wish to bet against CEO Alex Karp and company as they look to drive a comeback and bring the pain to Michael Burry, who’s likely hanging onto his big bearish bets against the firm going into the new year.
Though it’s impossible to tell whether an AI bubble burst, bear market moment or violent correction will be in store for 2026, or if Burry will be proven far too early (or maybe even wrong) to be such a big bear at this pivotal moment in the AI trade, I do find that Palantir has many serious growth drivers that might just convince the short-sellers to run for cover, especially if enterprise AI adoption is poised to have another massive year.
It’ll probably be tougher sledding for Palantir in 2026, even as AI momentum picks up
Even if Palantir is poised for more performance as its AI Platform (AIP) continues to fire on all cylinders, my bet is that it’s going to continue to be hard to gauge how a good quarterly number will be taken by investors. In short, it may be incredibly difficult to tell how shares of Palantir will react in 2026, even to a blowout number that surpasses bullish estimates in place by sell-side analysts. Undoubtedly, the last great quarter was met with a negative reaction.
And the big question for the new year, I think, is how big a beat it takes to drive a positive reaction. Is it even possible to spark a post-earnings rally anymore, given how much the multiple has climbed over the past year? Even with the most recent wave of volatility (1.50 beta), the stock is still poised to finish 2025 with a close to 140% gain.
Will a big chunk be given back as Burry looks to prove he’s right once again?
It might not take much to knock Palantir shares off the podium. In any case, there’s not much room for anything short of an applause-worthy result, especially as investors become tired of the higher-multiple names in their portfolio as momentum runs its course.
In my view, Palantir stock is more than expensive at over 400 times trailing price-to-earnings (P/E). Any metric you look at, it’s tough to find any AI-driven growth play that’s pricier, especially if Palantir stock looks to continue its recovery from the vicious November dip. As turbulence picks up, there are two specific drivers that I think make Palantir stock a dangerously risky name to short, even if you’re in good company alongside the likes of Michael Burry.
Palantir’s AI Platform might face a bigger boom in 2026
The AI Platform has been a phenomenal growth driver for Palantir, but the best might be yet to come, especially if enterprise adoption approaches some form of inflection point. It’ll be interesting to see how the commercial demand fares, especially as firms look for proven results as they look to commit more of their budget towards AI-related spend.
Of course, AIP’s incredible revenue growth can’t last forever, but 2026 might not be the year when things decelerate drastically. If last year’s strength begets even more strength, Palantir bulls may very well get the shocker of a quarterly surprise that’s needed to power Palantir higher from here. At the end of the day, it still might be early days for AIP adoption. If 2026 is the year agentic AI really takes off, perhaps Palantir has several more good days ahead it.
Though I think it’s getting harder to impress the crowd, Palantir might just have strong enough AI tailwinds to power further appreciation, and that’s a top fear I’d have if I were short the stock. At the same time, more margin gains might just allow the firm to grow into its obscenely high multiple. In any case, there’s a ton of room to expand as Palantir looks to make a case for why AIP ought to be the go-to operating system for AI and why it might be deserving of a $1 trillion market cap, something that Dan Ives thinks is possible.
In short, AIP is a source of a big growth surprise that might make Palantir well worth the sky-high premium. It’s gaining speed, and if there’s more acceleration to be had, investors might not wish to stand in the way of the freight train of growth as it effectively monetizes AI like few others can.
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