Michael Burry's Nvidia and Palantir Puts: Genius Move or Just Plain Nuts?
Alright, let's get this straight. Michael Burry, the guy who supposedly called the 2008 crash (let's not forget he's also called a lot of other crashes that didn't exactly pan out), is now betting against Nvidia and Palantir. Big time. Puts worth, like, a billion bucks.
The Big Short, Part Deux?
So, the dude's fund, Scion Asset Management, dropped nearly a cool billion on put options against Palantir, and another $187 million against Nvidia. That's 80% of their freakin' portfolio! Is this some kind of genius level play, or has Burry finally lost it? Michael Burry, of “Big Short” fame, discloses ~$1.1 billion options bet against Nvidia and Palantir
Palantir, up 176% this year? Nvidia, crossing the $5 trillion mark? Yeah, sounds like a bubble alright. But bubbles can stay inflated for a looooong time. Remember Pets.com? No? Exactly.
And here's where it gets interesting: Burry himself tweeted something about "sometimes the only winning move is not to play." Which, translated from cryptic investor-speak, probably means "I think everything's overpriced, but I'm still gonna gamble anyway."
I mean, let's be real, this is the same guy who bought call options on Pfizer and Halliburton. What's that even mean? Is he hedging his bets against the AI apocalypse with some good old-fashioned pharmaceuticals and oil?
AI Hype vs. Reality Check
Nvidia and Palantir are the darlings of the AI boom. Nvidia's got the hardware locked down, Palantir's selling AI software to governments and corporations. Both stocks have been on a tear. But Burry's betting that the party's over. He thinks they're overvalued, that the hype has peaked.
Maybe he's right. Palantir's stock dipped even after they posted some killer earnings. Why? Because their valuation is so damn high that even good news ain't good enough. Talk about high expectations.
But here's the thing: AI ain't going anywhere. Is it overhyped? Offcourse it is. Is it going to change everything? Probably. So, betting against the companies that are leading the charge seems… bold. Or maybe just stupid.
Then again, maybe I'm the crazy one here. Maybe Burry sees something we don't. Maybe he's got some secret algorithm that predicts market crashes with pinpoint accuracy. Or maybe he just likes the attention.
What's an Investor to Do?
Analysts are all over the place. Nvidia's still a "Strong Buy" with a potential upside of 15%. Palantir's a "Hold" with a potential downside of 25%. So, basically, the "experts" are just as confused as the rest of us. Which, honestly, is comforting in a way.
Burry's move could be a warning sign. Or it could be nothing more than a short-term hedge. Or it could be a self-fulfilling prophecy, as everyone panics and sells off their shares. Who knows? The market is a fickle beast.
So, What's the Real Story?
Look, I'm not gonna pretend I know what's going to happen. Burry's a smart guy, but he's not infallible. Nvidia and Palantir are great companies, but their valuations are insane. The AI boom is real, but it's also full of hot air. It's a mess. It's all a freakin' mess. And honestly, I'm not touching any of it with a ten-foot pole.
