Michael Burry, hedge fund manager of “The Big Short” fame, is calling the top in two of the stock market’s favorite plays — and somewhat contradicting himself in the process.

Palantir Technologies fell around 6% on Tuesday as a strong quarterly update from the company failed to extend its record-breaking rally.

Palantir expects $4.4 billion in 2025 sales, boosting its position as a leader in defence AI with major contracts and partnerships.

I think there's one under-the-radar AI stock could easily outperform it over the next decade. SoundHound AI ( SOUN 6.72%) could end up mirroring Palantir's returns, as it has all the makings of becoming the building blocks for much larger AI applications.

Palantir Technologies forecast fourth-quarter revenue above analysts' estimates on Monday, as the rapid adoption of artificial intelligence boosts demand for its data analytics services from businesses and governments.

Yet Wall Street chiefs Ted Pick of Morgan Stanley and David Solomon of Goldman Sachs gave voice to some of the unease in markets and raised the prospect of a pullback at an investment summit in Hong Kong.

U.S. commercial revenue skyrocketed 121% year over year on soaring demand for the company's artificial intelligence (AI)-powered software platform.

The two companies he’s shorting are the ones making all the money, which is super weird,” Alex Karp told CNBC’s “Squawk Box” on Tuesday.

Meanwhile, Veteran analyst Stephen Guilfoyle credits Palantir’s growth to strong fundamentals, noting, “Sales are running wild as are margins. The commercial business is exploding. Cash flows are not just robust; they are enormous. The balance sheet is simply the greatest balance sheet I can remember seeing. The CEO is focused and aggressive.”

Palantir fell more than 8.3% in premarket trading as another strong quarterly update from the company failed to extend its record-breaking rally, setting it on track for its worst single-day loss since mid-August.

An investor famous for betting against the housing market before it collapsed now has his sights on companies at the forefront of the AI boom.

On Oct. 27, Palantir executed a major defense AI pact, one with major long-term implications for its broader AI war footing, which is likely to become a massive on-ramp to Palantir’s next leg higher. Poland just put Palantir on speed dial.