While most investors are riding the artificial intelligence wave to new heights, Michael Burry is swimming in the opposite direction with a massive $1.1 billion bet that some of today’s hottest AI stocks will come crashing down.
Swimming against the AI current, Burry places a colossal $1.1 billion bet on today’s hottest stocks crashing down.
The famous investor who correctly predicted the 2008 financial crisis has placed enormous short positions against two AI giants. He’s wagering $900 million against Palantir and $200 million against Nvidia through put options. These bets represent roughly 80% of his entire portfolio at Scion Asset Management, showing just how confident he is about his prediction. Such concentrated bets highlight the risks and rewards of portfolio management strategies.
Burry’s track record gives his moves serious weight in financial circles. When he shorted the housing market before 2008, many called him crazy. He proved them wrong and made billions. Now he’s targeting companies he believes are wildly overvalued, even as they post strong earnings and growth.
The numbers behind his skepticism are eye-opening. Palantir trades at a forward earnings multiple of 280 times, which is more than ten times higher than Nvidia’s ratio. Historically, companies with price-to-sales ratios above 30 have struggled to maintain such lofty valuations.
Markets felt the impact immediately when Burry’s positions became public through Q3 2025 SEC filings. The Nasdaq dropped 3%, and Palantir’s stock fell 8% despite beating earnings expectations. It’s like watching a heavyweight boxer’s reputation alone knock down opponents. Adding to the market’s concerns, insider sales reached $9.3 billion worth of Nvidia and Palantir stock over the past two years.
Palantir CEO Alex Karp isn’t backing down, calling skeptics “crazy” and positioning his company as “the most important software company in America.” He points to real revenue growth driven by AI adoption in government and business markets.
Burry’s bet crystallizes a bigger debate dividing Wall Street. Are AI stocks genuinely worth their sky-high prices, or are we witnessing another bubble waiting to burst? His massive short positions suggest he believes the party can’t last forever.
This clash between one of history’s most successful contrarian investors and booming AI companies creates fascinating market drama. Whether Burry’s crystal ball remains accurate could determine if today’s AI euphoria becomes tomorrow’s cautionary tale.
