The legendary investor who famously predicted the 2008 housing crash is making waves again with a massive bet against artificial intelligence stocks. Michael Burry‘s investment firm, Scion Asset Management, has disclosed a stunning $1.1 billion in put options targeting AI giants Nvidia and Palantir in the third quarter of 2025.
Burry places massive $1.1 billion bet against AI stocks Nvidia and Palantir, signaling potential bubble ahead.
This bold move represents roughly 80% of his entire portfolio, signaling serious conviction that these hot stocks are headed for a fall.
The biggest chunk of Burry’s bet targets Palantir Technologies, worth about $912 million, while Nvidia faces a $186 million short position.
Put options are like insurance policies that pay off when stock prices drop, making them perfect tools for betting against overvalued companies. Think of it as Burry placing a giant wager that these AI darlings will come crashing back to earth.
Both companies sit at the heart of the AI revolution. Nvidia dominates the graphics processing unit market that powers AI systems, while Palantir specializes in data analytics and AI-driven solutions for government and businesses.
Their stocks have soared as investors rush to capitalize on artificial intelligence’s promise, but Burry apparently thinks the party has gone too far.
The scale of these bets has grabbed serious attention from Wall Street. When someone with Burry’s track record makes such dramatic moves, people listen.
His fame alone can influence market sentiment and trading activity, potentially creating a self-fulfilling prophecy where publicity drives down the very stocks he’s betting against. Following the disclosures, the Nasdaq declined approximately 3%, marking its worst week since April.
Many analysts are comparing the current AI stock rally to previous bubbles, including the dot-com boom and Bitcoin’s wild ride.
Nvidia’s valuation has reached astronomical heights, with some calling it the most important company on Earth.
But Burry’s contrarian approach suggests these valuations might be pricing in perfect growth for years to come. Meanwhile, his healthcare focus shows through his portfolio’s largest position in Molina Healthcare, which represents 39.2% of his holdings despite being down 17.8% from his average buy price.
This isn’t Burry’s first rodeo with bubble-bursting bets. His value investing philosophy focuses on identifying overvalued markets before they collapse.
If history repeats itself, his latest gamble could signal that artificial intelligence stocks represent the next major bubble ready to burst, much like the projected growth rates of 8.8% in the IT outsourcing market that have fueled tech investment enthusiasm.
