Burry Sounds Caution for Nvidia Again: Comparing to Cisco's Dot-Com Bubble Bust

Michael Burry, a prominent investor and one of the most notable short sellers of Nvidia (NVDA), has sounded caution for the chipmaker again. In a recent post on X, he compared Nvidia's trajectory to Cisco's boom and bust during the dot-com bubble.

Cisco, led by CEO John Chambers at the time, repeatedly said it was struggling to keep up with overwhelming demand for its networking equipment. However, when the dot-com bubble burst in 2000, many internet startups and telecom companies, Cisco's biggest customers, either slashed their capital spending or went bankrupt. As a result, Cisco's orders dried up much faster than expected, leaving the company with excess inventory and forcing it to write down billions of dollars' worth of unsold products and components.

Burry implied that Nvidia CEO Jensen Huang's narrative sounds similar to Cisco's during the internet boom. He noted that supply-constrained booms can sometimes foster overly optimistic expectations that later prove unsustainable.