Prof G Markets – "Is Palantir Overvalued? Stock Drops 10% on Michael Burry’s Bearish Bet"

Date: November 6, 2025
Hosts: Ed Elson (C), Guest: Gil Luria (Head of Technology Research, D.A. Davidson) (D), Guest: Liz Hoffman (Semaphore, business and finance editor) (G)
Note: Scott Galloway is not present in this episode.

Overview of Episode Theme

This episode dives into two major market-moving stories:

1. Palantir’s Falling Stock and Valuation Bubble: Analysis of Michael Burry's major bearish bet against Palantir, the sustainability of the AI-fueled rally, and the stock’s disconnect from fundamentals.
2. NYC Elects Democratic Socialist Mayor: Reaction from Wall Street and business leaders following Zoran Mamdani’s mayoral victory. Is an exodus of talent and capital actually unfolding, or is it just noise?

Throughout, the episode maintains a conversational but critical tone, with pointed insight, cautionary tales, and a bit of playful Wall Street lore.

Key Discussion Points and Insights

1. Palantir’s Stock Plunge & The Michael Burry Effect

Market Context and Reaction (03:00–06:00)

• Palantir dropped over 10% post-earnings, not because of weak fundamentals, but after Michael Burry’s Scion Asset Management bought puts worth ~$1B on 5M shares, signaling a bold bet against the soaring AI darling.
• Despite Palantir beating Wall Street expectations spectacularly (US commercial sales up 121%, government sales up 52%, and overall 63%), Burry’s bearishness drew attention to the sky-high valuation.

Why Burry Matters

• Burry rose to fame for calling the 2008 subprime mortgage crisis – "He is a big person, a big icon on Wall street, and now he believes that he has identified yet another bubble. This time it is AI…" (C, 03:48)

Valuation Critique (04:33–06:27)

• Gil Luria’s Take:
  • "The problem with trading at 100 times revenue is that those are numbers that are hard to justify… those are detached from the fundamentals." (D, 04:33)
  • The stock is "susceptible to just negative news flow of any type, including a very prominent person taking a negative position."
  • Palantir’s earnings were "spectacular"—huge acceleration and operating margin, best-in-class growth—but the multiple (300x earnings, 100x sales) is untethered from even those results.

Narrative vs. Fundamentals & The Tesla Parallel (06:27–08:29)

• Many retail investors hold Palantir based on faith in the company's mission, similar to early Tesla backers.

• Luria cautions: "us stodgy Wall street analysts are going to have a hard time making hard predictions on things that are going to happen 10, 20 years from now." (D, 08:08)

• Notable Quote:

  • "The market can stay irrational longer than you can stay solvent." (C, 08:29)

Shorting Palantir: A Game of Patience? (08:29–09:56)

• Shorts need patience; it might take years before the narrative runs out of steam.
• Referencing "The Big Short," Luria warns that many people lost money shorting the real estate bubble even as a few heroes hung on:
  • "The story of Big Short is about the couple of people that were somehow able to hang on long enough… A lot more people lost money shorting the real estate bubble in that timeframe." (D, 09:34)

CEO Alex Karp’s Animated Response (10:05–10:56)

• Clip played of Karp responding to Burry’s short:
  • "These people… have to pick on the one that actually helps people… every time they short us, we just are, like, tripling down on getting the better numbers and part, honestly, to make them poorer." (E, 10:18)
• Luria likens Karp’s reaction to Michael Jordan manufacturing slights for motivation:
  • "He loves this. He wants to compete against the shorts..." (D, 10:56)

Bubble Contagion and Broader AI Worries (11:49–12:40)

• Is Palantir’s volatility a sign of a larger shift? Luria says AI sentiment swings daily—from euphoria to bubble fears—but "Palantir is the highest valuation, so it’s just more susceptible than any other stock..."

2. NYC Elects Democratic Socialist Mayor Zoran Mamdani: Wall Street’s Reckoning

Immediate Business Community Reaction (16:58–18:06)

• Liz Hoffman: After some stage-of-grief processing, shock has turned to resignation. The city’s financial elite realizes their coalition lost despite pouring >$25M into stopping Mamdani.
• "There’s a real realization that they have lost huge amounts of power in their own backyard… over a city that they… believe that you know, they have built…"

Top Concerns: Not Just Taxes (19:47–21:44)

• Policing and quality of life are bigger worries than taxes, as the ultra-wealthy can often avoid them and many don’t even live in NYC.
• "They don’t mind being taxed so much as they mind being scolded. They mind being talked down to…" (G, 19:57)
• The elite doubts Mamdani’s executive chops:
  • "Their main complaint is that this guy is not qualified… They run big organizations and they think rightly or wrongly that big organizations are hard to run. And New York City is a giant organization..." (G, 21:02)

Class War & Symbolism (21:44–24:02)

• The campaign symbolically pitted “the rich” as the problem—explicitly or implicitly.
• “It is anti billionaire and it is anti multi. Multimillionaire, arguably anti millionaire... To what extent is it people on Wall Street and business leaders just reflexively saying, well, you've said that we are your enemy, therefore you are our enemy and we've got a problem.” (C, 21:54)
• Hoffman sees echoes of political backlash against elite tech and meme stock-era populism:
  • "We kind of live in an oligopoly… [business leaders] are different from the ‘only I can save the world’ breed you get out in Silicon Valley… But I do think you're starting to see real backlashes there… a real political element. It goes… back to… Brexit and what got Trump elected. And you know, this is a market show. So you'll remember the meme stock. It was really eat the rich." (G, 22:38)

Will There Be a Wall Street Exodus? (24:02–26:04)

• Fears of an exodus are overblown; CEOs and firms aren't leaving en masse, despite threats.
• "It’s not happening. I’m pretty skeptical of it…" (G, 24:31)
• J.P. Morgan’s opening of a massive new Midtown headquarters is used as proof business bets on NYC endure.
• "Ultimately these are human capital businesses, so they got to be where the talent is… And there are still hundreds of applicants for every seat available in that J.P. Morgan office tower." (G, 25:38)

3. Host’s Reflections: Attraction > Threats (26:28–End)

• Ed Elson summarizes the empty threats from business leaders ("Atlas Shrugged" allusions). Despite pre-election drama ("I'm moving to Florida/Texas!"), major finance names like Bill Ackman sounded supportive post-election.

• Notable Quote from Ackman’s post-election tweet:

  • "Ooranmamdani, congrats on the win. If I can help New York City, just let me know what I can do." (C, 26:45)

• Supporting headlines:

  • "Business leaders say they can live with Mamdani." (Business Insider)
  • "Mamdani gets wary Wall Street support after New York City election." (Bloomberg)
  • "Rich New Yorkers who fear higher taxes just can’t quit the city."

• Final reflection: The next time business leaders threaten to leave, remember this episode—New York’s pull usually outweighs any ideological friction.

Notable Quotes & Moments

• Gil Luria on valuation vs. fundamentals:
  • "All these numbers are detached from the fundamentals… they’re not based on the stream of future cash flows discounted to… this period." (D, 04:33)
• Ed Elson referencing the classic market adage:
  • "The market can stay irrational longer than you can stay solvent." (C, 08:29)
• Alex Karp’s fiery retort to Burry:
  • "…every time they short us, we just are, like, tripling down on getting the better numbers and part, honestly, to make them poorer." (E, 10:18)
• Liz Hoffman on the business elite’s real concern:
  • "They don’t mind being taxed so much as they mind being scolded… they care very much about the ladder that they climbed up." (G, 19:57)
• Ed Elson’s closing lesson:
  • "…next time this crops up… let’s just remember what happened in New York." (C, 26:55)

Major Segment Timestamps

• 03:00 – [Palantir Post-Earnings, Burry’s Short]
• 04:33 – [Gil Luria on Valuation & Investor Sentiment]
• 08:29 – [Market Irrationality & Tesla Comparison]
• 10:18 – [Alex Karp Responds to Short Sellers]
• 16:58 – [Liz Hoffman on NYC’s Election Aftermath]
• 19:47 – [Wall Street Concerns: Scolding > Taxes]
• 24:31 – [Will the Exodus Happen?]
• 26:28 – [Host’s Reflections & Lesson for Future "Exodus" Threats]

Episode Tone & Takeaways

• The episode is analytical and sometimes skeptical, injecting dry humor and analogies to sports (Jordan), movies ("Big Short"), literature ("Atlas Shrugged"), and meme-stock mania.
• Listeners are left with a sense that both markets and politics are driven at least as much by narrative, tribalism, and bravado as by “hard numbers”—and that headlines about dramatic shifts rarely play out as predicted.

Summary:
This episode unfurls the risk and reward of betting against momentum (whether in stocks or politics), cautions against overreacting to headline risk, and reminds us that in both markets and cities, reality tends to be stickier than punditry would have you believe.