Michael Burry Warns of Bubble, Takes Massive Short Against AI Stocks
The “Big Short” investor is once again challenging market euphoria - this time targeting the soaring valuations of artificial intelligence stocks.
Key Takeaways:
- Burry’s firm revealed $1.1 billion in short positions against Nvidia and Palantir.
- The move echoes warnings of another speculative bubble.
- Nvidia’s market cap has surpassed $5 trillion, while Palantir is up over 400% this year.
- Burry warned tech spending growth mirrors late-1990s bubble levels.
Burry Turns His Sights on AI
Michael Burry, known for predicting the 2008 housing crash, is now betting against the biggest winners of the artificial intelligence boom. His firm, Scion Asset Management, disclosed put options worth about $1.1 billion, targeting Nvidia and Palantir, two of the top-performing tech stocks of 2025.
According to filings shared by Quiver Quantitative, the bearish bets include $912 million against Palantir and $187 million against Nvidia. The disclosure immediately shook markets, with Palantir dropping nearly 8% and Nvidia slipping 2% in pre-market trading.
Echoes of Past Bubbles
Burry resurfaced on X (formerly Twitter) with a cryptic post referencing bubbles and a photo of Christian Bale, who portrayed him in The Big Short. He later shared charts showing that tech spending growth has reached dot-com-era levels, while cloud demand appears to be cooling – a combination he sees as unsustainable.
The move underscores Burry’s reputation for calling out overvaluation before markets turn. His warning suggests that the relentless optimism surrounding AI stocks could be masking deeper fragility beneath the surface.
AI Boom Shows No Signs of Slowing
Still, the artificial intelligence sector continues to dominate markets. Nvidia’s valuation has surpassed $5 trillion, making it more valuable than entire national economies, while Palantir’s shares have surged 400% amid record demand for AI-driven data analytics.
Even crypto projects like Pi Coin are tapping into the AI narrative, showing how far the hype has spread beyond traditional tech.
Betting Against the Crowd
Burry’s short doesn’t target innovation itself, but the mania surrounding it. His play suggests that the market’s faith in endless growth may have run too far ahead of reality.
Whether this marks the early stages of another tech correction or simply Burry’s latest contrarian gamble remains to be seen – but his warning is clear: the higher the optimism, the harder the fall.
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Alexander Zdravkov is a person who always looks for the logic behind things. He has more than 3 years of experience in the crypto space, where he skillfully identifies new trends in the world of digital currencies. Whether providing in-depth analysis or daily reports on all topics, his deep understanding and enthusiasm for what he does make him a valuable member of the team.
