Burry Targets AI Heavyweights
Michael Burry — the hedge fund manager who famously predicted the 2008 financial crisis — is once again betting against market euphoria.
In a new filing, his firm Scion Asset Management disclosed put positions against Nvidia (NVDA) and Palantir (PLTR), signaling that the investor known as “The Big Short” is skeptical of the sky-high valuations driving today’s AI boom.
The filings didn’t disclose the size of the bets, but the move immediately caught Wall Street’s attention given Burry’s long history of calling market tops before they unravel.
Burry’s wagers come as Nvidia and Palantir remain two of the most aggressively priced AI names — both benefiting from investor enthusiasm around machine learning, defense analytics, and hyperscale computing.
Palantir’s Post-Earnings Slide
Palantir Technologies (PLTR) raised its full-year revenue outlook to $4.4 billion and reported better-than-expected Q3 results, yet its stock dropped as much as 7% in early Tuesday trading.
Analysts say the sell-off reflects valuation fatigue rather than weak fundamentals. The company’s shares had already doubled this year, fueled by optimism around its government AI platforms and commercial analytics software.
“Palantir’s numbers were solid — but the stock’s momentum has run ahead of reality,” one analyst told WSA. “At 20 times sales, even good news gets sold.”
Shares briefly rose 7% Monday after earnings but reversed as traders digested the lack of new large-scale government contracts in the guidance.
Nvidia Faces Policy and Valuation Pressures
Nvidia (NVDA) also slipped more than 2% on Tuesday ahead of its Nov. 19 earnings report, amid renewed U.S. restrictions on chip exports to China.
In a recent interview, U.S. officials reaffirmed that Nvidia’s most advanced AI chips — including the Blackwell architecture — will remain off-limits to Chinese buyers, citing national security risks.
Despite its near $5 trillion market valuation, Nvidia has become a focal point for both growth and risk in the AI sector — commanding over 80% of the global GPU market used to train large AI models.
Burry’s short position suggests he believes the stock’s momentum — up more than 180% year-to-date — could soon face a correction.
A History of Contrarian Calls
Michael Burry, portrayed by Christian Bale in The Big Short, rose to fame for predicting the 2008 subprime mortgage collapse.
Today, his Scion Asset Management oversees roughly $155 million in assets.
Burry has repeatedly used put options to bet against market bubbles:
- In 2021, he shorted Tesla (TSLA) — which initially rallied before plunging the following year.
- Earlier this year, he doubled his position in Estée Lauder (EL), which has since surged more than 40%.
On social media, under the username “Princess Cassandra”, Burry recently hinted that another correction may be looming.
“Sometimes, the only winning move is not to play,” he wrote on X in late October — alongside an image of Bale as Burry in The Big Short.
Echoes of Broader Market Caution
Burry’s bearish positioning mirrors a broader tone of institutional caution emerging on Wall Street.
Executives from Goldman Sachs and Morgan Stanley have recently warned that AI valuations may be outpacing real-world adoption, drawing parallels to the dot-com buildup of the early 2000s.
With the Nasdaq up more than 20% this year, driven largely by the “Magnificent Seven,” even modest disappointments in AI revenue could trigger steep pullbacks.
For Burry — a contrarian by nature — it’s exactly the kind of setup that has historically preceded his most successful trades.
WSA Take
Michael Burry’s move against Nvidia and Palantir isn’t just another bearish headline — it’s a sentiment check on an AI market that’s priced for perfection.
With companies spending hundreds of billions on infrastructure and valuations hitting uncharted territory, Burry’s skepticism highlights an uncomfortable truth: AI may be real, but profits still lag behind promises.
Read our recent coverage on Amazon–OpenAI infrastructure deal.
Explore more market insights on the Wall Street Access homepage.
Disclaimer:
Wall Street Access does not work with or receive compensation from any public companies mentioned. Content is for informational and educational purposes only.
