‘Big Short’ Michael Burry Expands Short Bets on NVIDIA and Palantir

Michael Burry is once again standing on the opposite side of AI trading. The investor, known for shorting the subprime mortgage crisis, recently stated in his blog that he has increased his short positions on AI-related stocks such as NVIDIA and Palantir.

Multiple reports indicate that Burry holds large put options on NVIDIA, semiconductor ETF SOXX, Nasdaq 100 ETF QQQ, and Oracle, most of which are due in 2027, and these short bets account for approximately 9.5% of his overall investment portfolio.

Palantir is a target explicitly named by Burry. He believes that Palantir's reasonable value is between $46 and $50, the current stock price is overvalued, and he questions whether its business model can support the market valuation given. The stock has fallen from approximately $161 at the time he took his position to around $137.

NVIDIA epitomizes the time pressure of such contrarian trading. As of May 8th, NVIDIA closed at around $215, close to its all-time high of $217.80, while the put options with a strike price of $110 held by Burry are still significantly underwater.

Burry compares the current AI trend to the end of the internet bubble between 1999 and 2000, but the market may still continue to price around AI growth narratives in the short term, and fundamental disagreements may not immediately translate into a decline in stock prices.