Burry Puts His Money Where His Mouth Is: Billionaire Takes Aim at AI Stocks

Michael Burry, a well-known hedge fund manager, has taken a bearish stance against two prominent AI stocks: Palantir and Nvidia. Before closing his hedge fund, Scion Asset Management, he disclosed put options worth an estimated $1.1 billion against these companies.

Burry's bet against Palantir and Nvidia is reminiscent of his famous 'big short' trade on subprime mortgage bonds in the 2000s. He has a history of being early to market trends, but also being too far ahead of his time.

In his final 13F filing for Scion Asset Management, Burry disclosed 50,000 put options on Palantir with a notional value of $912 million and 10,000 puts on Nvidia with a notional value of $186,580. Notably, the actual capital at risk is limited to the amount paid for the puts, which makes his bet against these companies similar to his bets against subprime mortgages.

Burry has also called into question Palantir's ability to sustain its growth and believes Nvidia's heavy customer concentration poses a significant risk. He recently adjusted his positions by selling all his puts on Nvidia and Palantir that expire in December, but maintained short positions in both stocks and Palantir puts with 2027 expirations.