Michael Burry's $1.1B Bearish Bet Against AI Stocks: Palantir and Nvidia Analysis

This analysis examines Michael Burry’s significant bearish positioning against Palantir Technologies (PLTR) and NVIDIA Corporation (NVDA), representing a $1.1 billion contrarian bet against the artificial intelligence sector rally. According to regulatory filings released on November 4, 2025, Burry’s Scion Asset Management acquired put options on these AI leaders, with Palantir positions comprising 66% of the portfolio and NVIDIA representing 14% [1][2][3]. The move comes as Burry recently returned to social media to warn about AI valuations, positioning this as a high-profile challenge to the AI-fueled market enthusiasm [4].

Both AI stocks have shown remarkable resilience despite Burry’s bearish positioning:

:

• Current trading at $189.15 with modest 0.67% gains on November 6th [0]
• 52-week performance of +240.66% reflects massive market enthusiasm [0]
• However, valuation metrics appear stretched with P/E ratio of 429.89x and P/B ratio of 67.83x [0]
• Strong fundamentals persist with 28.11% net profit margin and 19.09% ROE [0]

:

• Trading at $195.78 with 0.29% daily gains [0]
• More modest 52-week performance of +34.45% compared to Palantir [0]
• Valuation elevated but more reasonable at 55.62x P/E ratio [0]
• Exceptional profitability with 52.41% net profit margin, though concerning 1.05% ROE [0]

Both stocks experienced approximately 5% declines over the past 5 days [0], suggesting some market digestion of the Burry news, though the broader Technology sector remains positive at +0.40% for the day [0].

The bearish positioning occurs despite strong operational results:

:

• Revenue of $1.18B (+63% YoY, beating $1.09B estimates) [6]
• EPS of $0.21 (beating $0.17 estimates) [6]
• U.S. Commercial revenue surged +121% to $400M [6]
• Secured $2.8B in total new contract value [6]

:

• Revenue of $46.74B (Q2 2025) [0]
• EPS of $1.05 (Q2 2025) [0]
• Data Center segment representing 88.3% of revenue at $115.19B [0]

Burry’s positioning represents a significant contrarian challenge to AI market enthusiasm, particularly given his historical credibility from predicting the 2008 housing crisis. However, several critical factors complicate the analysis:

: The 13F filings lack crucial details including options expiration dates and specific strike prices [3], making it difficult to assess whether these are short-term tactical bets or longer-term strategic positions. The $1.1 billion notional value represents 80% of Scion’s disclosed portfolio, but the fund may hold other undisclosed positions that could hedge these bearish bets [2].

: Burry has demonstrated timing challenges before - his housing market bet began in 2005 but didn’t pay off until 2008 [6]. Options strategies can be particularly costly if timing is incorrect, even when the ultimate thesis proves correct [6].

The market’s relatively muted reaction suggests investors are weighing Burry’s concerns against continued strong fundamentals. Notably, Palantir CEO Alex Karp called Burry “batshit crazy” for the bearish bet [5], reflecting management confidence but potentially indicating executive hubris that historically has preceded market corrections.

: Palantir’s P/E ratio of 429x suggests significant downside risk if growth decelerates [0]. Both stocks have experienced substantial runs (PLTR +240% YoY, NVDA +34% YoY) [0], increasing vulnerability to profit-taking.

: The technology sector’s mixed recent performance [0] suggests potential rotation away from high-growth names. Major indices show mixed performance with NASDAQ down 0.088% [0], indicating broader market uncertainty.

: Options strategies face time decay, making correct timing crucial. Historical patterns show that being early on contrarian bets can be as costly as being wrong [6].

: Options expiration dates and potential roll strategies, Q4 earnings reports, institutional flow data, and AI sector sentiment indicators.

: Revenue growth sustainability, competitive dynamics in AI chips and software, regulatory developments, and interest rate environment impact on growth valuations.

: AI adoption rates across industries, technological disruption potential, and market cycle positioning.

Michael Burry’s $1.1 billion bearish positioning against Palantir and NVIDIA represents a significant contrarian signal against AI market enthusiasm. The positions are substantial relative to Scion’s portfolio (80% total), with particular emphasis on Palantir at 66% allocation [2]. While valuation concerns are justified - especially Palantir’s extreme 429x P/E ratio [0] - both companies continue to demonstrate exceptional fundamental performance with strong revenue growth and profitability [6].

The market’s relatively resilient response suggests investors are balancing Burry’s credibility against continued operational excellence. However, the lack of transparency around options specifics [3] and historical examples of Burry’s timing challenges [6] warrant caution. The situation highlights the ongoing tension between AI sector momentum and valuation discipline, with Burry’s bet serving as a potential catalyst for increased volatility in high-valuation technology stocks.

Investors should carefully assess their portfolio exposure to AI stocks, consider their risk tolerance for potential volatility, and monitor key indicators including options expiration details, upcoming earnings reports, and broader market sentiment toward growth valuations.