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GENERATED TITLE: Burry's Palantir Puts: A Data Dive Beyond the Hype
Decoding Burry's Bearish Bet
Michael Burry, the man who made a killing shorting the housing market, is back in the news. This time, regulatory filings reveal a massive bearish position on Palantir Technologies (PLTR): five million put options, to be exact. It's a bold move, especially considering PLTR stock is hitting all-time highs. But before we jump to conclusions about an impending collapse, let's dissect the data.
Burry's Scion Asset Management didn't just bet against Palantir. They also picked up a million put options on Nvidia (NVDA). According to Whale Wisdom, these positions represent significant market value: $912.1 million for Palantir and $186.58 million for Nvidia. That’s not pocket change. It's a clear statement that Burry sees something fundamentally misaligned in these companies' valuations. Now, the immediate question is: what is he seeing that the market is missing?
One clue might lie in Burry's return to X (formerly Twitter). His post, referencing an AI bubble and Star Wars, is cryptic but pointed. "These aren't the charts you are looking for. You can go about your business," he wrote. The charts he attached compare cloud segment growth for Alphabet, Amazon, and Microsoft from 2018 to 2022 with the current period. Another chart details the web of AI deals between Nvidia, OpenAI, Oracle, and other tech giants. The final chart shows AI capex mirroring the tech spending of the 1999-2000 tech bubble.
The implication is clear: Burry believes the AI hype is creating a bubble reminiscent of the dot-com era. He's not just looking at the surface-level growth; he's digging into the underlying economics and seeing unsustainable trends. This isn't just about Palantir or Nvidia in isolation; it's about the entire tech landscape. I've looked at enough of these charts to know that he's onto something.
Burry's "Cassandra Unchained" persona (a reference to the Greek mythological prophetess cursed to make accurate predictions but never be believed) further reinforces this narrative. He sees himself as a lone voice warning against impending disaster, a role he's played before. His updated header image, "Satire of Tulip Mania," is another visual cue, drawing a parallel between the current market frenzy and the infamous Dutch tulip bubble of the 17th century. The question is: will anyone listen this time?
Burry's Palantir Bet: More Than Just AI Skepticism?
Beyond the Headlines: A Deeper Dive
It's tempting to dismiss Burry as a perma-bear, someone who constantly predicts market crashes. But his track record speaks for itself. He famously predicted and profited from the 2008 housing crisis, a feat immortalized in "The Big Short." He also called out the "greatest speculative bubble of all time in all things" back in 2021. While not every prediction has come true, his analysis is always worth considering.
What makes this Palantir bet particularly interesting is the company's unique position. Palantir isn't just another tech company; it's a data analytics firm with close ties to government agencies. Its Gotham platform is used by intelligence agencies, while its Foundry platform serves commercial clients. This dual nature makes it difficult to assess Palantir using traditional metrics. (Their revenue model, for example, isn't as straightforward as a SaaS company's).
The core question surrounding Palantir is whether its growth can justify its valuation. The stock has surged on AI hype, but is the underlying business truly benefiting from the AI boom, or is it just riding the wave of investor enthusiasm? Burry's bet suggests he believes the latter.
The updated 13F filing also reveals other moves by Scion Asset Management. The firm added 50,000 shares of Lululemon Athletica, opened a 125,000 share position in Molina Healthcare, and a 480,000 share position in SLM Corp. He also purchased 2.5 million calls on Halliburton Co. and six million calls on Pfizer, Inc. This shows that he's not entirely bearish; he's simply reallocating capital to sectors he believes offer better value.
Scion closed its positions in Estee Lauder Companies, Regeneron Pharmaceuticals, MercadoLibre, and UnitedHealth Group. These moves further highlight Burry's shift away from high-growth tech and towards more established, value-oriented companies. It's a classic contrarian strategy: buy low, sell high. It is worth noting that these shifts in portfolio allocation don't necessarily mean he has a strong conviction that the bull run will continue.
Ultimately, Burry's Palantir puts are a calculated risk. He's betting against the prevailing market sentiment, wagering that the AI bubble will burst and that Palantir's valuation will come crashing down. Whether he's right remains to be seen. But one thing is certain: his moves are worth watching closely. And this is the part of the report that I find genuinely puzzling, as it seems to go against his earlier predictions.
The Market's Echo Chamber
Burry's dire warnings caught Musk's attention in late 2021, when the world's richest man labeled him a "broken clock." The Scion Asset Management chief also sent shockwaves through Wall Street in early 2023 with a single-word post: "Sell." If Burry is right, the market will eventually correct itself. If he's wrong, he'll lose a significant amount of money. But either way, his bet on Palantir is a reminder that not everyone is buying into the AI hype. According to a recent article, Michael Burry Is Super-Bearish On Palantir — With 5 Million Puts - Palantir Technologies (NASDAQ:PLTR).
Overvalued or Undervalued? Time Will Tell.
Burry's Palantir puts are a high-stakes gamble, a contrarian bet against the prevailing market euphoria. It's a reminder that even in the age of AI, fundamental analysis still matters. Whether he's a visionary or a "broken clock" remains to be seen, but his analysis is a valuable counterpoint to the relentless hype. The market will ultimately decide who's right (and who's wrong), but for now, Burry's bearish position serves as a crucial reality check.
A Reality Check
Burry's not just betting against Palantir; he's betting against the entire AI narrative. And given his track record, it's a bet worth paying attention to.
