Michael Burry’s Scion Asset Management has disclosed bearish positions in Nvidia (NVDA) and Palantir (PLTR), signalling caution toward the artificial intelligence sector that has driven much of this year’s stock market gains.
According to Scion’s latest 13F regulatory filing, the investment firm holds put options on one million shares of Nvidia and five million shares of Palantir, suggesting Burry expects potential downside in both stocks.
Nvidia shares have risen about 54% in 2025, extending a multi-year rally that has made the chipmaker central to the AI hardware market. Palantir, known for its government and enterprise AI contracts, has gained over 170% year-to-date. Despite these increases, both stocks traded lower following the disclosure, Nvidia down 1.9% premarket and Palantir falling 6.8%, even after reporting stronger-than-expected third-quarter results and raising full-year guidance.
Burry Cautions on AI Valuations
Burry, best known for his short bet on the U.S. housing market before the 2008 financial crisis, has recently expressed scepticism about the scale of investment pouring into AI-related companies. In a post on X (formerly Twitter), he shared charts showing a slowdown in cloud computing growth at major technology firms Amazon (AMZN), Alphabet (GOOGL), and Microsoft (MSFT), all significant players in the AI sector.
Another chart compared the current surge in U.S. tech capital expenditure with levels last seen during the dot-com bubble of 1999-2000. Alongside the data, Burry wrote, “These aren’t the charts you are looking for. You can go about your business,” referencing a line from Star Wars.
Burry also changed his X profile name to “Cassandra Unchained”, referencing the mythological figure whose accurate predictions were ignored. Earlier, he posted an image of actor Christian Bale portraying him in The Big Short, adding, “Sometimes we see bubbles. Sometimes, the only winning move is not to play.”
AI Stocks Still Driving Market Growth
The disclosure follows Nvidia’s recent milestone as the first company to reach a $5 trillion market capitalisation, after a 55% rise this year that added more than $1.6 trillion in value. Palantir has similarly benefited from AI adoption in public sector and corporate contracts.
While Burry’s bets suggest a cautious stance, analysts note his positions could be hedges rather than outright short calls, depending on portfolio structure and risk exposure.
