ByMichael Burry takes $1.1B short positions against Nvidia and Palantir, signaling growing fears of an AI stock bubble amid record tech valuations.
Michael Burry Bets Big Against AI Stocks: Nvidia and Palantir Valuations Under Fire
New York, November 4, 2025 — Famed investor Michael Burry, best known for predicting the 2008 financial crisis, has taken a major bearish stance against two of the biggest winners of the AI boom — Nvidia (NASDAQ: NVDA) and Palantir Technologies (NYSE: PLTR) — signaling growing skepticism around inflated AI stock valuations.
According to a regulatory filing for the quarter ending September 30, Burry’s firm, Scion Asset Management, purchased put options representing 1 million shares of Nvidia and 5 million shares of Palantir, a combined notional value of roughly $1.1 billion.
That means Scion is betting $187 million against Nvidia and nearly $912 million against Palantir, positioning Burry among the few prominent investors openly wagering that the AI bubble may soon deflate.
Burry Warns of Slowing AI and Cloud Growth
Shortly after the filing surfaced, Burry posted a cryptic message on X (formerly Twitter) featuring a chart comparing cloud revenue growth at Amazon Web Services (AWS), Google Cloud, and Microsoft Azure.
Between 2018 and 2022, those units delivered annual growth rates of 36%, 45%, and 22%, respectively — figures that have since cooled sharply. Alongside the chart, Burry wrote:
“These are not the charts you’re looking for. You can go about your business.”
Investors interpreted the post as a warning that the AI trade might be running on fumes, echoing similar warnings about stretched valuations across tech and semiconductor sectors.
Wall Street Executives Echo Valuation Concerns
At a recent financial summit in Hong Kong, leading Wall Street CEOs backed the idea of an upcoming market correction.
Morgan Stanley CEO Ted Pick said investors should brace for a 10–15% pullback, calling such a drawdown “a healthy development” after a year-long rally in equities.
Goldman Sachs CEO David Solomon echoed the sentiment, saying a moderate correction in the next 12–24 months would be a “normal and constructive” part of the cycle.
The S&P 500 and Nasdaq have been hovering near record highs this year, largely powered by AI enthusiasm and surging valuations of “Magnificent Seven” stocks, including Nvidia, Microsoft, and Alphabet.
Palantir Posts Record Earnings — But Shares Slide
Burry’s bearish bet came just as Palantir Technologies reported better-than-expected quarterly results, beating on both revenue and earnings per share (EPS). Yet, despite strong fundamentals, Palantir stock fell more than 8% in premarket trading due to ongoing concerns over valuation.
CEO Alex Karp defended the company’s growth trajectory, firing back at analysts in his shareholder letter:
“The ascent has confounded most financial analysts… Some of our detractors have been left in a kind of deranged and self-destructive befuddlement.”
Karp even declared that Palantir’s results were “arguably the best results that any software company has ever delivered.”
While Palantir continues to expand its U.S. government contracts and AI-driven enterprise offerings, analysts argue its valuation exceeds that of much larger peers like Microsoft, Google, and Nvidia.
Is the AI Rally Losing Momentum?
Palantir has long been known for its deep ties with U.S. defense and intelligence agencies and its powerful AI software that helps organizations analyze complex datasets. Despite this, investors are increasingly questioning whether its growth can justify a price-to-earnings (P/E) multiple far above industry averages.
As AI mania drives record valuations, Michael Burry’s billion-dollar short positions could mark a turning point in sentiment — signaling that even seasoned investors see bubble-like conditions forming in the sector.
Key Takeaways
- Michael Burry’s Scion Asset Management took short positions on Nvidia and Palantir totaling $1.1 billion.
- His X post hinted at slowing cloud growth and overvaluation in the AI space.
- Wall Street leaders at Goldman Sachs and Morgan Stanley warned of a potential 10–15% correction.
- Despite record Palantir earnings, the stock fell sharply due to valuation concerns.
- The AI stock rally may be facing its first serious test as investors reassess growth expectations.
