Michael Burry, the investor who famously predicted the 2008 housing crash, is once again placing a massive bet against the market.
This time, he’s targeting two of the biggest names in artificial intelligence: Nvidia and Palantir.
According to a regulatory filing released this week, Burry’s hedge fund, Scion Asset Management, bought put options on Nvidia, valued at $187 million, and 5 million shares of Palantir, valued at $912 million, as of Sept. 30.
Put options are contracts that increase in value when a stock’s price drops, which signals Burry is betting these stocks are overvalued.
Both Nvidia and Palantir have had huge stock runs this year. Nvidia, which dominates the AI chip market, has surged 54%.
Palantir, known for its AI-powered data analytics and government contracts, is up 174%.
Burry hasn’t commented directly on the trades, but last week he posted a cryptic warning on X: “Sometimes, we see bubbles. Sometimes, there is something to do about it. Sometimes, the only winning move is not to play.”
Palantir CEO Fires Back
Palantir CEO Alex Karp had a strong response when asked about Burry’s bets.
Speaking to CNBC, Karp called the move “bats— crazy,” and added:
“The two companies he’s shorting are the ones making all the money, which is super weird.”
Karp went further, saying, “He’s actually putting a short on AI. … It was us and Nvidia.”
He also accused short sellers of manipulating the market and questioned Burry’s motives: “It’s not even clear he’s not doing this to get out of his position. I mean these people, they claim to be ethical, but they are actually shorting one of the great businesses of the world.”
Is the Bubble Popping?
Burry’s bets come as concern grows over whether AI hype has pushed stock valuations too far, too fast.
The S&P 500 and Nasdaq 100 have both hit record highs, driven heavily by AI-linked names.
Even after Palantir beat earnings expectations and offered a strong forecast, the stock dropped 8% on Tuesday.
Nvidia also dipped 4%. These declines suggest investors may be getting nervous about how much higher AI stocks can go.
While Burry is betting against AI darlings, he’s also hedging with bullish positions elsewhere.
His fund purchased call options on Halliburton and Pfizer, and held shares in Lululemon, Bruker, Molina Healthcare and Sallie Mae.
As of the end of September, Scion’s U.S. stock portfolio was down to just eight holdings, from 15 the previous quarter. The firm managed about $155 million in assets as of March.
Whether Burry’s latest prediction plays out like his 2008 housing call remains to be seen.
But one thing is clear: when he speaks, or places a billion-dollar bet, Wall Street listens.
With AI stocks under pressure and valuations sky-high, some investors may start wondering if Burry is early, or just right again.