Burry Bets $1.1B Against Nvidia, Palantir in AI Bubble Call
The Facts
- Michael Burry's hedge fund, Scion Asset Management, disclosed put options on Nvidia and Palantir worth approximately $1.1 billion, representing about 80% of the fund's $1.38 billion portfolio, according to quarterly filings released Monday.
- Burry, who gained fame for predicting the 2008 housing market crash as portrayed in "The Big Short," posted on social media: "Sometimes, we see bubbles. Sometimes, there is something to do about it. Sometimes, the only winning move is not to play." He seemed to be referencing concerns about AI valuations.
- Following the disclosure, Nvidia shares fell more than 2% in early trading, while Palantir dropped as much as 16% despite reporting 63% revenue growth to $1.18 billion for the third quarter and raising its full-year outlook to $4.4 billion.
Sources Split
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The Spin
Narrative A
Burry's massive bet against Nvidia and Palantir is misguided market manipulation targeting two companies delivering exceptional results. These firms are leading the AI revolution and generating massive profits, making short positions against them irrational. The attack on successful AI businesses represents egregious behavior from someone who can't recognize genuine innovation.
Narrative B
Burry's bearish positions against AI darlings reflect legitimate concerns about dangerous market bubbles fueled by speculation and circular financing. The AI boom mirrors previous bubbles,with excessive capital spending, inflated valuations and interconnected deals that artificially prop up prices. Smart money recognizes the warning signs of another devastating crash waiting to happen.
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