Usman Salis
● Michael Burry, the investor who famously called the 2008 housing crash, is now betting big against the AI stock rally. According to a recent post from Rohan Paul, new regulatory filings show that Burry's firm, Scion Asset Management, has bought $1.1 billion worth of put options targeting AI heavyweights like Nvidia and Palantir—two companies that have seen massive gains during the AI boom.
● It's worth noting that this $1.1 billion figure represents notional exposure, not the actual cash Burry put up. The filings show the total value of shares linked to the options, which is typically much larger than what investors actually spend. Put options are essentially bets that a stock will fall—they give you the right to sell shares at a set price before a certain date. If the stock drops or volatility spikes, the options become more valuable. However, the filings don't reveal strike prices or expiration dates, so the exact details of Burry's strategy remain unclear.
● Given Burry's track record—immortalized in The Big Short—his move is turning heads on Wall Street. Some analysts see it as a warning sign that AI stocks may be overheated and due for a pullback. Others suggest these could simply be hedges rather than outright short positions, especially since 13F filings can be up to 45 days old by the time they're made public, meaning the trades may have already been adjusted or closed.
● According to LBC News, Burry's position reflects broader concerns that AI valuations have gotten ahead of reality. While companies like Nvidia and Palantir have certainly benefited from the surge in demand for AI chips and infrastructure, critics question whether current prices can hold up. Now, the man who saw the housing bubble coming seems to be wondering if the AI stock surge might be the next big bubble ready to burst.
Usman Salis
