Michael Burry Targets Nvidia, Palantir and Oracle as AI Bubble Concerns Rise

Michael Burry has increased his bearish exposure to Nvidia while simultaneously buying call options on the chipmaker, a seemingly contradictory trade that the “Big Short” investor says is designed to limit risk rather than profit from a rally.

Burry disclosed the position through his Substack, explaining that he purchased December Nvidia calls with strike prices in the mid-to-high $200 range. The calls were added as a hedge against a larger short position in Nvidia and other AI-linked stocks, not as a reversal of his bearish thesis.

His short stock positions now represent more than 21% of his portfolio, excluding put options. Burry has also disclosed bearish bets against Oracle, Palantir, Nebius and Caterpillar.

The trade reflects Burry’s broader concern that investors are assigning excessive valuations to companies benefiting from the artificial intelligence infrastructure boom.

He has questioned Nvidia’s valuation in particular, arguing that conventional price-to-earnings comparisons may understate the risks associated with a business benefiting from unusually strong pricing power and concentrated AI spending. Burry has also warned that aggressive capital expenditure across the industry could eventually translate into weaker earnings if infrastructure demand slows.

His stance follows weeks of warnings about the broader equity market. A recent Coinpaper analysis of Burry’s market warning noted that he has compared current conditions with periods preceding major market reversals.

At the same time, Burry has acknowledged that Nvidia could continue delivering exceptionally strong near-term results. Before the latest report, he expected another blockbuster quarter even while maintaining his short, highlighting the distinction between short-term operating performance and his longer-term valuation thesis. That tension was also evident in Coinpaper’s recent look at Burry’s NVDA bet.

Burry’s position is being tested against Nvidia’s strongest financial performance yet. The company reported fiscal second-quarter 2027 revenue of $96.2 billion, up 106% year over year, while Data Center revenue surged 117% to $89 billion. Nvidia also guided for approximately $108 billion in revenue for the following quarter.

Those figures significantly exceeded Nvidia’s prior $91 billion quarterly guidance and reinforce the bullish argument that AI infrastructure demand remains exceptionally strong. Coinpaper’s coverage of the latest Nvidia earnings also highlighted questions around customer concentration and the financing supporting large-scale AI projects.

The debate therefore extends beyond whether Nvidia can keep growing. The bigger question is whether the scale and durability of that growth justify its valuation as semiconductor companies, cloud providers and AI developers commit unprecedented sums to new computing infrastructure.

Nvidia itself says the expansion is accelerating. Its latest earnings release showed gross margins holding near 75% even as revenue more than doubled from a year earlier.