Mr. Michael Burry Places Big Bets Against Company Nvidia and Company Palantir, Warns of an "AI Bubble"

Mr. Michael Burry, the investor famed for predicting the 2008 housing crash, has once again drawn attention by placing substantial put options against two high-profile technology firms: Company Nvidia and Company Palantir. According to filings and reporting, these positions anticipate meaningful declines in share prices by 2027, reflecting a deep skepticism about current market valuations and sustainability of recent gains.

At the core of Mr. Michael Burry's argument is the belief that a speculative frenzy around artificial intelligence has created an AI bubble reminiscent of the dot-com era. While both Company Nvidia and Company Palantir have delivered substantial performance and have been central to investor storytelling about the transformative power of AI, Mr. Michael Burry warns that outsized expectations have pushed valuations to levels that are difficult to justify given underlying fundamentals.

Put options are a direct expression of conviction about potential downside: they increase in value as the underlying stock falls. By taking these positions against Company Nvidia and Company Palantir, Mr. Michael Burry is signaling that he expects a significant re-rating of these companies' equity prices within a multi-year horizon. This move has implications for market sentiment because of Mr. Michael Burry's reputation as a contrarian investor who flagged systemic risk in the past.

Investors and market observers should consider several important takeaways. First, the presence of concentrated bearish option bets does not guarantee a crash; markets often remain irrational longer than anticipated. Second, the rapid adoption and monetization of AI technologies by enterprises can justify premium valuations if revenue and profit trajectories catch up with expectations. Third, risk management is essential: for those long these stocks, consider hedging strategies, position sizing, and re-evaluating entry points around established support and resistance levels.

From a technical perspective, analysts will be watching support levels where buyers historically stepped in and resistance points that capped rallies. Price action around these levels for Company Nvidia and Company Palantir will provide signals about whether sentiment is shifting. Fundamental investors should balance forward-looking growth assumptions with realistic scenario analysis and stress testing against slower growth or increased competition.

The broader lesson is that markets periodically undergo phases where narrative momentum outpaces fundamentals. Whether Mr. Michael Burry's thesis fully materializes remains to be seen, but his positions are a reminder to assess valuation rigorously, to be vigilant about concentration risk, and to prepare for multiple outcomes. For traders and longer-term investors alike, monitoring option flow, earnings guidance, and macro indicators will be critical in deciding whether the current environment is sustainable or symptomatic of a larger correction.