Renowned for his prescient financial moves, Michael Burry of Scion Asset Management has once again captured Wall Street’s attention with a notable bearish stance against two major technology players, Nvidia and Palantir. Known for predicting the 2008 financial crisis, Burry’s investment strategies have always been closely monitored. Here’s the latest scoop on his remarkable play against the burgeoning artificial intelligence (AI) sector.
Michael Burry’s Big Short on Nvidia and Palantir
According to Scion’s regulatory filings for the third quarter of 2025, the hedge fund acquired put options worth a staggering $187 million on Nvidia and an even more significant $912 million on Palantir. Collectively, these positions represent 80% of Scion’s portfolio as of September 2025, signaling a strong bearish outlook on two of the most-watched companies in the tech world.
Put options provide the holder with the right to sell shares at a predetermined price, often used as a hedge against falling prices or as an outright betting strategy. Such a high allocation in puts suggests Burry believes these AI-driven companies are either overvalued or heading toward potential market corrections.
Decoding Burry’s Concerns About AI
Burry, via posts on X (formerly Twitter), hinted at his market outlook by sharing cryptic messages such as “sometimes, we see bubbles.” He also posted graphics raising concerns about circular financing in the AI industry, particularly involving Nvidia, a leader in manufacturing AI model training chips. Such warnings have raised eyebrows among investors, some of whom perceive today’s AI boom as reminiscent of prior tech bubbles.
Nvidia and Palantir: The AI Titans Facing Scrutiny
Nvidia, a leader in developing GPUs optimized for machine learning and large-scale AI models, experienced a rollercoaster year with growing demand for its AI chips. However, news of Burry’s bearish positions triggered a 2% premarket drop in Nvidia’s stock, with additional ripple effects felt across the semiconductor industry.
Similarly, Palantir Technologies, known for its cutting-edge AI solutions in large-scale data analysis, faces speculative pressure caused by Burry’s actions. Having recently transitioned toward a stronger focus on AI-driven products, the company’s valuation mirrors the AI sector’s perceived potential—but perhaps not without risks.
For instance, Palantir’s stock may see volatility as scrutiny deepens around whether its AI solutions justify its market price.
Comparing Historical Context
This isn’t the first time Burry has expressed doubts about the AI boom. Earlier in 2025, Scion disclosed bearish positions on Nvidia as a potential hedge. His actions back then hinted at skepticism surrounding the seemingly unstoppable rise of AI-related equities—and this skepticism persists.
Breaking Down the Implications for Investors
Burry’s critics highlight that his predictions can sometimes take years to materialize. However, his willingness to challenge consensus—particularly in speculative sectors like AI—has often proven both provocative and insightful. Retail and institutional investors alike would do well to assess their exposure to AI-related stocks, navigating hype cycles with caution.
Looking for Market-Ready Insights?
As market trends evolve, staying ahead is crucial. If you’re fascinated by cutting-edge innovations in AI or the technology shaping tomorrow, tools like the Nvidia AI Platform can provide key insights into where the industry is headed. Whether you’re an industry professional or simply keeping tabs on market sentiment, understanding these tools can be invaluable.
Michael Burry’s bold strategy highlights the importance of approaching high-growth industries like AI with balanced optimism and informed caution. Stay tuned for updates from Scion Asset Management and other leading financial players as 2025 unfolds.
