Burry Targets AI Stocks: Nvidia, Micron, and Palantir in His Crosshairs

Michael Burry, known for betting on the subprime mortgage collapse and portrayed in The Big Short, has taken aim at artificial intelligence (AI) stocks. He's shorted Nvidia (NVDA), Micron Technology (MU), and Palantir Technologies (PLTR).

Burry's thesis on Nvidia centers around the economics of AI infrastructure, questioning whether investments from hyperscalers make sense. He believes chip technology advances too quickly, reducing their economic lifespan to less than three years.

However, cloud computing giants Amazon and Alphabet have discussed their chip investment economics, showing strong returns on their AI infrastructure investments. This suggests Nvidia will continue benefiting from these deals, especially with a forward price-to-earnings ratio (P/E) of under 14.5 times fiscal 2028 analyst estimates.

Burry's short thesis on Micron is more convincing, as the company's growth and margin expansion stem from being a laggard in high-bandwidth memory (HBM). As supply-demand balance normalizes, this will hurt Micron. The stock has a forward P/E of under 6 times fiscal 2027 estimates.

Palantir is another target for Burry's short position. He believes the company's metrics resemble those of a consultant rather than a software-as-a-service (SaaS) company, with rising receivables and low deferred revenue. However, Palantir's margins are more reflective of a top-tier SaaS company, with a gross margin of nearly 85% and an adjusted operating margin of 62%. Despite its high valuation, Palantir's growth and opportunities are undeniable.