Michael Burry, the investor made famous by The Big Short for predicting the 2008 financial crisis, has once again captured public attention with his latest moves on Wall Street. This time, he is warning of what he sees as a growing bubble in artificial intelligence stocks, and his actions appear to match his words. Through his hedge fund, Scion Asset Management, Burry has taken large bearish positions against two of the biggest names in the AI sector, Nvidia and Palantir. The filing of these trades has raised new debates about whether the AI boom that has dominated global markets is sustainable or headed for a sharp correction.
Burry’s skepticism is not new. Over the years, he has often gone against popular market trends and questioned overvalued sectors. His latest move adds fuel to ongoing discussions about whether AI company valuations have run too far ahead of their actual earnings potential. While the industry has seen record investments and stock surges, profitability remains uncertain for many firms. Burry’s decision to short Nvidia and Palantir through more than $1 billion in put options suggests that he believes a correction could soon follow the current euphoria.
The filing, released by the U.S. Securities and Exchange Commission for the quarter ending September 30, showed that Scion Asset Management purchased puts worth over $1 billion on Nvidia and Palantir. A put option gives the buyer the right to sell shares at a set price, effectively allowing profit if the stock price drops. Such trades are often used as hedges, but given Burry’s public comments and the scale of his position, many analysts see this as a direct bet against the AI-driven surge in technology stocks. The hedge fund also disclosed smaller call positions on Pfizer and Halliburton, but the AI-related trades drew the most attention.
Burry, who rarely gives interviews, has instead shared cryptic hints through his social media account on X (formerly Twitter). In one of his recent posts, he wrote, “Sometimes, we see bubbles. Sometimes, there is something to do about it. Sometimes, the only winning move is not to play.” The message was accompanied by charts highlighting patterns in technology spending and capital expenditure growth that he believes resemble those seen during the dot-com bubble of the late 1990s. One of the charts showed that much of the AI sector’s current momentum is being driven by a few major players, mainly Nvidia and OpenAI, echoing earlier market periods when investor enthusiasm was heavily concentrated in a few large companies.
His decision to short Nvidia and Palantir comes at a time when both companies have been the face of the AI boom. Nvidia, a chipmaking giant, has seen its stock price rise sharply over the past year, driven by demand for AI processors used in data centres and machine learning. The company recently became the world’s first semiconductor firm to cross the $5 trillion valuation mark, a milestone that many see as a reflection of investor optimism. Palantir, known for its data analytics software and government contracts, has also enjoyed a strong rally in 2025, with its shares gaining over 150% year to date before the recent pullback.
However, both companies faced sharp declines following their latest earnings updates and broader market concerns. Palantir’s shares dropped by as much as 16% after its quarterly results, despite beating revenue expectations and raising its full-year forecast to $4.4 billion. Analysts noted that investors were disappointed by what they perceived as limited visibility into 2026 growth. Nvidia’s stock also fell more than 2% in early trading on Tuesday, coinciding with the broader drop in tech stocks across the Nasdaq and S&P 500 indices.
The market reaction was further influenced by warnings from major financial leaders. Goldman Sachs CEO David Solomon and Morgan Stanley CEO Ted Pick both suggested that a 10% to 20% correction in equity markets could occur within the next 12 to 24 months. Their comments added to the growing unease among investors already questioning whether AI stocks are overvalued.
Burry’s track record gives weight to his latest warning. He was among the few investors who accurately predicted the collapse of the U.S. housing market in 2008, a crisis that triggered the global financial meltdown. His story was chronicled in Michael Lewis’s book The Big Short, and later portrayed on screen by Christian Bale in the 2015 film adaptation. That event established Burry as a contrarian investor who is not afraid to take positions that challenge mainstream market sentiment.
Before turning to finance, Burry’s path was unconventional. Born and raised in San Jose, California, he studied economics and pre-med at the University of California before completing medical school and working as a neurology resident at Stanford Hospital. He eventually left medicine to pursue his passion for investing, using an inheritance and family loans to start Scion Capital in 2000. Within a few years, his deep research and independent thinking earned him a strong reputation among investors. His analysis of the subprime mortgage crisis, though initially doubted by many, led to huge profits for his fund and his clients.
After closing Scion Capital in 2008, Burry stepped back from the spotlight for several years, returning to the market in 2013 under the name Scion Asset Management. The revived firm has kept a low profile, managing over $150 million according to its latest filings. Despite being relatively small compared to major hedge funds, Scion’s trades often attract attention because of Burry’s past successes and his reputation for spotting market excesses before others do.
This is not the first time Burry has taken on high-profile technology stocks. In 2021, he revealed put options on Tesla, predicting that the electric carmaker’s valuation was unsustainable. Although Tesla’s share price initially continued to rise, it later experienced a major decline during 2022. Such moves illustrate his willingness to challenge market hype even when it appears risky or unpopular.
Palantir’s CEO Alex Karp has already responded to Burry’s latest short, calling it “bats–t crazy” during an interview with CNBC. Karp defended his company’s position in the AI race, claiming that both Palantir and Nvidia are “the ones making all the money.” His comments reflect a broader divide between tech leaders who believe the AI boom still has years of growth ahead and critics like Burry who see signs of speculative excess.
Burry’s social media handle, “Princess Cassandra,” is a fitting alias. In Greek mythology, Cassandra was cursed to foresee the future but never be believed. Burry appears to see himself in a similar position, warning of bubbles that few others recognise until it is too late. His posts have become part of his public image, a mix of data-driven caution and enigmatic messaging that invites interpretation without offering direct guidance.
