TLDR
- Michael Burry’s Scion Asset Management bought $1.1 billion in put options against Nvidia and Palantir in Q3 2025, with $912 million targeting Palantir and $186.6 million against Nvidia.
- Burry, famous for predicting the 2008 housing crisis, posted on social media that “sometimes we see bubbles” just as Nvidia reached a $5 trillion market cap.
- Palantir trades at a P/E ratio of 417 and price-to-sales ratio of 116, while Nvidia trades at a P/E of 53 and price-to-sales of 28.
- Both stocks have declined following Burry’s bet disclosure, with analysts warning Bitcoin could face a 50% correction as the Crypto Fear & Greed Index hits “Extreme Fear” at 24.
- Eight of the top 10 most valuable U.S. companies are AI stocks worth $23 trillion combined, nearly matching the entire U.S. GDP of $29 trillion.
Michael Burry has made his move. The investor who correctly predicted the 2008 housing collapse now has his sights set on the AI sector.
His hedge fund, Scion Asset Management, purchased put options worth $1.1 billion against two of the market’s hottest AI stocks. The bigger target is Palantir Technologies, with $912 million in put options. Nvidia faces a smaller but still substantial $186.6 million bet against it.
Palantir Technologies Inc., PLTR
Burry became famous through the book and movie “The Big Short.” His track record includes shorting overvalued tech stocks before the dot-com crash and betting against subprime mortgages when everyone else was bullish.
On October 31, Burry broke nearly two years of social media silence with a cryptic post. “Sometimes we see bubbles… sometimes the only winning move is not to play,” he wrote on X.
The timing was striking. Nvidia had just hit a record $5 trillion market cap.
The Numbers Behind the Bet
The valuation gap between these two companies is staggering. Nvidia trades at a P/E ratio of 53 and a price-to-sales ratio of 28.
Palantir’s numbers are in another universe. The company has only $3.8 billion in trailing-12-month revenue. Yet the stock is valued at $483 billion. That puts its price-to-sales ratio at 116 and its P/E ratio at 417.
Palantir reported strong earnings this week. The stock still dropped. Nvidia’s stock also declined after CEO Jensen Huang suggested China might be catching up in AI development.
Burry’s fund operates differently than most hedge funds. It holds very few positions at any time and changes them frequently. As of Q3’s end, it owned only four stocks outright. The fund also holds options in four other companies.
The broader AI sector dominates today’s market. Eight of the top 10 most valuable U.S. companies are AI-focused. Together, they’re worth $23 trillion. That’s close to the entire U.S. GDP of $29 trillion.
Bubble or Innovation Wave
Companies like Amazon and Meta Platforms are pouring billions into AI development. Cloud providers report massive engagement from business clients using their AI platforms.
The investment is creating real value. AI is driving automation and business improvements across industries. But the valuations have some market watchers nervous.
Trader Deltan, a pseudonymous crypto analyst, told TheStreet Roundtable that Burry’s warning “might actually be the most accurate thing anyone’s said this cycle.” He predicts Bitcoin could fall to $50,000, marking a 50% correction.
The Crypto Fear & Greed Index dropped to 24 this week. That’s “Extreme Fear” territory and the lowest level since early 2023. Just a month ago, it stood at 60.
“The AI bubble, the crypto bubble — they’re both real,” Deltan said. “What we’re seeing now could easily be the start of a 50% correction.”
Burry’s put options give him flexibility. If prices don’t drop, the options simply expire. Many hedge funds use options strategies to hedge their positions.
Both Nvidia and Palantir stocks have fallen since news of Burry’s bets became public. CryptoQuant’s Bull Score Index has dropped to zero, its lowest reading since January 2022.
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