Michael Burry Warns of AI Bubble -- Targets Nvidia and Palantir With Massive Puts

Michael Burry (Trades, Portfolio)'s Scion Asset Management has placed large bearish bets against the AI rally, buying put options tied to Nvidia NVDA and Palantir PLTR, according to a 13F filing.

The filing shows Scion holds put exposure equivalent to about 1 million Nvidia shares and roughly 5 million Palantir shares. The move comes as Nvidia has climbed about 54% year to date and Palantir has surged more than 170%, market-beating gains that some investors say have pushed valuations high. Markets reacted: Nvidia traded down about 2% premarket and Palantir slid roughly 7% after the disclosure.

Burry, famed for his 2008 housing-market bet, flagged caution in social posts and charts. He highlighted a slowdown in cloud growth at Amazon, Alphabet and Microsoft, and warned that tech capital expenditure is approaching levels last seen in the dot-com era. On X he changed his profile to Cassandra Unchained and reposted a scene from The Big Short, underscoring his skepticism of frothy AI bets.

The trades are also an indication of the creation of a high-profile hedge against AI exuberance, and the fact that some old school investors are placing bets via options, regarding a pullback, as major AI names keep rolling their steep rallies.