Burry Takes Dual Stance on NVDA Amid AI Sustainability Concerns

Michael Burry, the investor made famous by 'The Big Short', has taken a complex dual stance on Nvidia (NVDA) stock. Before Nvidia's Q2 earnings announcement, he expanded his bearish position and initiated additional short positions in Oracle, Palantir, Nebius, and Caterpillar.

Burry acknowledged that Nvidia appears undervalued at first glance due to its low price-to-earnings multiple relative to its expansion trajectory. However, he emphasized that his calculated fair value for the shares sits 'much lower than today's market value.'

The investor's skepticism centers on Nvidia's sustainability, questioning whether the company's dominant position in artificial intelligence and exceptional profit margins can endure as long as Wall Street anticipates.

Burry acquired December-expiry call options with strike prices ranging through the mid-to-upper $200s to provide downside protection. He emphasized that these contracts weren't purchased with profit generation in mind but rather as a protective measure for his larger short positions.