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Generated Title: Michael Burry's $1.1B NVDA & PLTR Bet: Genius Move or Reckless Gamble?
Michael Burry, the man who made a fortune betting against the housing market before the 2008 crash, is back in the news with a massive $1.1 billion bet against Nvidia (NVDA) and Palantir (PLTR). His hedge fund, Scion Asset Management, recently disclosed put options on 5 million Palantir shares and 1 million Nvidia shares. The question isn’t just what he’s doing, but why, and whether this is another stroke of genius or a miscalculated gamble.
Diving into the Data: Burry's Bearish Thesis
Let's be clear: Burry isn’t known for playing it safe. He's a contrarian, and his latest move is a classic example. He’s betting against two stocks that have been on a tear, fueled by the AI hype train. Palantir is up over 170% this year, and Nvidia isn't far behind, rising 54%. These aren’t small moves; they're parabolic. But parabolic moves are rarely sustainable.
The core of Burry's bet likely rests on the idea that these stocks are overvalued. And the data supports this. Look at Palantir: even after reporting a 63% revenue growth (reaching $1.18 billion for Q3), the stock still dipped. That tells you something. The market's expectations were so high that even stellar results weren't enough. It's like a runner who wins the race but still disappoints the coach because he didn't break the world record.
But there's also a degree of short-term hedging at play here. The 13F filing, released 11 days early, suggests Burry wanted to get ahead of the narrative, possibly to influence market sentiment. This isn't just about long-term value; it's about timing and perception.
The Buffett Indicator and AI Mania
Burry isn't alone in his skepticism. Warren Buffett's favorite valuation metric, the ratio of total US stock market capitalization to GDP, has hit a record high of 233.7%. Buffett himself has stated that a ratio approaching 200% is "playing with fire." (That's a direct quote, and not something Buffett says lightly.) This indicator suggests that the market as a whole is significantly overvalued relative to the underlying economy. Michael Burry, Warren Buffett Flash Red Warnings for November as Markets Overheat
Now, let's consider the AI angle. Burry believes we're in an AI bubble, comparing the current hype to the dot-com era. He's not the only one drawing parallels. The rapid rise of AI stocks, coupled with sky-high valuations, does echo the irrational exuberance of the late 1990s. But is it the same? That's the million-dollar question.
He's been shorting the market since Q1 2025 (or at least, that's what market analyst Kashyap Sriram suggests). It's a bold move, reminiscent of his strategy before the 2008 financial crisis. The Short Bear, an analyst, described Burry’s latest 13F filing as his wildest yet. The filing shows Burry executing aggressive short positions reminiscent of his strategy before the 2008 financial crisis.
I've looked at hundreds of these filings, and the sheer scale of Burry's put options is unusual. He's not just dipping his toes in the water; he's diving headfirst into the deep end.
Here's where my analysis diverges slightly from the consensus. While I agree that Nvidia and Palantir are richly valued, I'm not convinced that a major market collapse is imminent. A correction, certainly. But a full-blown crash? That requires a catalyst, and right now, I don't see a clear one on the horizon. Of course, the market is unpredictable, and unforeseen events can always trigger a downturn.
Is This Time Really Different?
The crucial question is whether the AI revolution is fundamentally different from previous tech bubbles. Are Nvidia and Palantir truly transformative companies with long-term growth potential, or are they simply riding a wave of hype? The answer, I suspect, lies somewhere in between.
Nvidia dominates the AI hardware market, and Palantir is a leader in AI software for government and enterprise clients. These are real businesses with real revenues. But their current valuations reflect expectations of continued, exponential growth. And that's where the risk lies. Can they sustain this pace? Can they fend off competition? Can they adapt to changing market conditions?
According to TipRanks’ Stock Comparison Tool, Nvidia stock currently holds a Strong Buy rating, with an average price target of $237.86, implying an upside of 15% from current levels. On the other hand, PLTR stock carries a Hold consensus among 16 analysts. Palantir’s average stock price target of $155.44 suggests a downside of over 25%. NVDA, PLTR: Michael Burry Bets Big Against Palantir and Nvidia Stocks with New Put Options
Burry's Playing a Different Game
Ultimately, Burry's bet is a calculated one, based on his analysis of market valuations, growth expectations, and the potential for a correction. Whether it's a genius move or a reckless gamble remains to be seen. But one thing is certain: it's a reminder that even in the age of AI, fundamental principles of investing still apply.
The Market's About to Get a Wake-Up Call
It's not about being "right" or "wrong," it's about probabilities. Burry is betting that the odds are stacked against Nvidia and Palantir, and he's putting his money where his mouth is. And that's a signal that the market needs a serious reality check.
