Michael Burry, the contrarian investor known for predicting the 2008 housing market collapse, has now turned his attention to what he believes is the next big financial trend. His fund, Scion Asset Management, has revealed substantial bearish positions against NVIDIA Corp. and Palantir Technologies, two companies central to the current frenzy surrounding AI stocks.
The latest SEC 13F filing shows Scion has purchased put options on 5 million Palantir shares and 1 million NVIDIA shares, which altogether have a notional value of approximately $1.1 billion. Put options appreciate when stock prices drop, an indication that Burry is betting on a pullback in AI valuations.
The revelations shook the technology markets on Tuesday, dragging NVIDIA down by almost 4% and Palantir by over 8%, despite the latter posting strong quarterly earnings and raising its annual profit guidance.
Currently, with a market capitalization exceeding $5 trillion, NVIDIA has become a leading figure in the global AI boom. Palantir, one of the most expensive names in the S&P 500, is currently trading at a multiple of projected price-to-sales of more than 80 times, having increased by 175% in 2025.
Burry seemed to hint at his scepticism in a post on X, where he shared an image of Christian Bale playing him in The Big Short. He subtitled it, “Sometimes, we see bubbles.” Later, he posted charts showing the slowing growth of cloud businesses at Amazon, Alphabet, and Microsoft, suggesting that AI-driven investments might be approaching bubble territory.
Palantir CEO, Alex Karp, called the short bets ‘bats, crazy,’ telling CNBC that “we are two of the only companies making all the money in AI.” He accused some short sellers of ‘market manipulation.’ Since Burry’s short became public, Palantir has lost about Rs 4.2 lakh crore ($51 billion) in market value.
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The AI pullback sparked a global technology selloff, as Japan’s Nikkei 225 declined 2.5%, while South Korea’s KOSPI dropped 2.85%. Bitcoin was briefly pushed below $100,000 before recovering. For Burry, who has shorted NVIDIA before, this latest move could be another Big Short moment, or it could prove to be an expensive misinterpretation of the AI boom.