I covered Palantir exactly three weeks ago here on CNBC Pro before Q3 earnings, looking for a breakout from $190. We did see the breakout through $190 to a high of $207.50 right before earnings. Immediately after earnings, despite a historic quarter, the stock got “Burry’ed” below $170 last week and is now back to $190. In that time, Michael Burry — famed short seller from the movie “The Big Short” — and Alex Karp have exchanged barbs. Here’s the chronology of events. Oct. 30 – Burry returns to X warning of an AI bubble. Nov. 3 – PLTR reports record quarter, holds 5 p.m. conference call, highlights rule of 40 (will expand below). Nov. 3 – Burry’s Scion Asset Management files 13F with short positions via long puts in NVDA and PLTR. Nov. 4 – Alex Karp responds on CNBC calling Burry ” bats— crazy ” Nov. 5-6 – The Karp / Burry debate and $1 billion bet against AI spread rapidly Nov. 9 – Burry claims the interpretation of the 13F by Karp and others lacks proper information for valid conclusions: “Can’t crack a simple 13F.” Nov. 10 – Burry disputes hyperscaler capex hardware depreciation schedule claims earnings overstated What can we make of all of this? You’ll notice the Nasdaq-100 topping in late October following Burry’s initial X post (and first X post in two years) and Scion’s 13F report released showing short positions in NVDA and PLTR, but Palantir stock rallying sharply into the Q3 earnings print 2 days later. The Q3 earnings report was nothing short of stellar, but the stock reacted sharply on the downside amidst the scuttlebutt with Burry catching down to the Nasdaq-100. Let’s review the Q3 earnings to get some context: Adjusted EPS came in at 21 cents compared to 10 cents in the same quarter last year for 110% growth. Expectations were for 17 cents per share so EPS beat street expectations by 25.46%. EBITDA margins this quarter grew to 51.4% vs expectations of 45.8%, and 39.09% seen in the same quarter last year. A particular metric investors were watching was the total revenue figure ($1.18 billion – up 63% year-over-year) broken down by commercial and government contracts. If there was too much contribution by government contracts the view would have been that may be unsustainable and the stock would react negatively. However, U.S. commercial sales grew by 121% year over year to $397 million, which was well ahead of what the street was expecting. The contract backlog was massive indicating strong future demand. As a result they raised full-year 2025 guidance to $4.396-$4.40 billions and US commercial expected to top $1.433 billion. The shift towards commercial contracts helps drive forward the narrative that Palantir is becoming less of a government/defense contractor and more of an enterprise AI software company. During the conference call, CEO Alex Karp stressed the “Rule of 40” which is a popular metric used by Saas (Software-as-a-Service) business to evaluate companies by a single metric. (Rule of 40 = revenue growth rate + Operating margin). If the sum is higher than 40, the company is considered to be performing well. With Palantir’s revenue growth rate at 63 and operating margin at 51, Alex Karp added the two figures together to arrive at a reading of 114. This signifies to investors that Palantir may no longer buy a highly valued pie in the sky growth story, but a company that’s evolving into a profit generation machine. For comparison, here are four other Saas companies with their Rule of 40 reading. Snowflake (SNOW) : 47% Datadog (DDOG) : 56.7% ServiceNow (NOW) : 53% Adobe (ADBE) : 50.6% With these kind of fundamental growth rates combined with this scale and market cap, the liquidity in this stock is deep and attracting large institutional interest. The weekly chart shows a nice pullback into a uptrend line from mid-24 as well as the 20-week moving average. Turning to the daily chart you can see the whirlwind roundtrip the stock has been on amidst the back and forth between Karp and Burry. PLTR “Burry’ed” the stoops below the 20-day MA, 50-day MA, and even that weekly uptrend line before gapping back above the $190 level on above average (50-day average) volume. We’re still holding an 8.5% allocation in our fast money portfolio and a 2% allocation in our flagship growth model at Inside Edge. If the dust clears and we see a clean breakout into the $200’s and above we’re going to increase position size in both portfolios. We’ll have to see if Burry was a one-hit wonder with his short in real estate, or if he can do it again with his (confusing) call of being bearish in the AI revolution. -Todd Gordon, Founder of Inside Edge Capital, LLC We offer active stock alerts, portfolio management, as well as regular market updates like the idea presented above here . DISCLOSURES: Gordon owns PLTR personally and in his wealth management company Inside Edge Capital All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. 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