Michael Burry's 'Big Short' Intuition Shifts to AI Investments with Puts on Nvidia and Palantir
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 04 2025
0mins
Should l Buy NVDA?
Source: SeekingAlpha
Michael Burry's Bearish Stance: Michael Burry's Scion Asset Management has taken bearish positions on Nvidia and Palantir, indicating caution towards the AI sector despite their significant market gains this year.
Market Performance and Concerns: Nvidia and Palantir have seen substantial increases in their stock prices, but recent premarket trading shows declines, prompting Burry to share charts that suggest a slowdown in cloud growth among major tech companies.
Cautionary Insights: Burry's social media posts reference historical market bubbles and caution investors against the current AI stock trends, likening his warnings to the character Cassandra from mythology.
Nvidia's Market Milestone: Nvidia recently became the first company to reach a $5 trillion market capitalization, reflecting its dominance in the AI hardware market, while Palantir continues to thrive through AI-driven contracts.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy NVDA?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 186.940
Low
200.00
Averages
264.97
High
352.00
Current: 186.940
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Nvidia's Earnings Report to Signal Market Direction
- Market Concentration Analysis: RBC Wealth Management's Rob Sluymer highlights that the concentration of mega-cap tech stocks has significantly increased over the past few years, leading to investors being overweight in these stocks, which have now declined about 7% year-to-date.
- Nvidia Earnings Preview: Nvidia is set to report its fourth-quarter earnings on February 25, and Sluymer believes this will serve as a crucial market indicator; if the results fall short of expectations, it could trigger a larger correction in tech stocks.
- Investor Sentiment Shift: As attention on tech stocks rises, Sluymer notes that some funds are rotating out of these high-valuation stocks into other sectors, a typical behavior in times of high market concentration.
- Future Market Outlook: Should Nvidia's earnings report disappoint, it may lead to a decline in market confidence in tech stocks, potentially resulting in a broader market correction that could impact overall investment strategies.
See More
Nvidia Poised for Strong GPU Sales in China Again
- Massive Market Opportunity: Nvidia has negotiated a deal with the U.S. government to resume GPU sales to China, with CEO Jensen Huang estimating the Chinese market could generate up to $50 billion annually, significantly boosting the company's performance.
- Sales Recovery Expectations: Before the ban, Nvidia projected $8 billion in sales from China for Q2 FY 2025; if sales return to similar levels, GPU sales could exceed $30 billion, presenting substantial growth potential.
- Revenue Growth Forecast: Wall Street anticipates Nvidia's revenue will reach $326 billion for FY 2027, but given the surge in AI computing spending, actual revenue could hit $350 billion, further enhancing market confidence.
- Strong Profitability: If Nvidia achieves $350 billion in revenue while maintaining a 56% profit margin, it could generate $196 billion in profits, and with a reasonable 40x earnings valuation, the stock price could rise to $322, indicating a compelling investment opportunity.
See More
Ray Dalio Warns of Global Capital War
- Capital Flow Warning: Billionaire Ray Dalio warns that the global capital flow system is breaking down, potentially leading to a 'capital war' that could significantly impact the stock market, especially given the current high levels of debt.
- Debt Crisis Concerns: The U.S. government's increasing debt and reduced foreign purchases of U.S. bonds may lead to soaring bond yields and higher borrowing costs, thereby affecting corporate financing capabilities.
- AI Investment Demand: The estimated $3 trillion required for AI development by 2030 is testing the limits of capital markets, and any systemic shock could lead to a depletion of available funding.
- Historical Lessons: Dalio's warning echoes past market crashes, particularly the role of debt in bursting bubbles, prompting investors to focus on stocks with strong cash flows to navigate potential market contractions.
See More
Strategies to Mitigate Market Risks
- Market Risk Management: In the current highly dangerous market environment, tech giants like Apple, Google, Amazon, Meta, and Nvidia are leveraging diversified product lines and innovative technologies to mask underlying market weaknesses, thereby enhancing investor confidence.
- Performance of Tech Giants: These companies exhibit a degree of resilience in financial performance, attracting investor attention despite increased market volatility, indicating their relative safety amid uncertainty.
- Investor Confidence: By maintaining continuous innovation and adaptability, these companies not only retain market share but also enhance investor confidence in the tech sector, reflecting their significance during economic turmoil.
- Future Outlook: Despite facing market challenges, the strategic positioning and financial robustness of these tech giants provide them with strong growth potential in future market recoveries, potentially leading the industry resurgence.
See More
AI Summit in India Attracts Tech Giants
- Market Validation: The AI Impact Summit in India has attracted CEOs from tech giants like Nvidia, OpenAI, and Alphabet, highlighting the global business community's recognition of India's market potential, which is expected to drive future investments and collaborations.
- Infrastructure Investment: With rising demand for AI data centers, significant infrastructure investment deals are anticipated, further solidifying India's position as a global hub for AI technology.
- Talent Attraction: India is regarded as an 'AI talent factory,' with over 60% of Global Capability Centers focusing on AI and data development, and 80% of new centers projected to be AI-led in the next six to eight months, indicating a strong demand for tech talent.
- Executive Position Growth: An increasing number of firms are establishing senior leadership roles, such as 'Chief AI Officer,' in India, reflecting a reliance on local talent and a focus on the AI sector, which enhances competitiveness in the global market.
See More
Eli Lilly Leverages AI to Transform Drug Development
- AI Platform Launch: Eli Lilly launched the TuneLab platform in September last year, allowing other drugmakers digital access to proprietary data on drug molecule performance, which saves significant time and money, enabling companies to focus on their best research projects.
- Major Investment Partnership: Eli Lilly partnered with Nvidia, committing $1 billion to build a supercomputer aimed at deepening disease understanding and advancing drug development, marking a significant step in the company's AI drug development efforts.
- Huge Market Potential: According to Straits Research, the AI-powered drug discovery industry is expected to grow at an annual rate of 30% through 2034, reaching over $20 billion, providing Eli Lilly with substantial future revenue opportunities.
- Increased Collaboration Opportunities: By owning a powerful drug development platform, Eli Lilly can not only optimize its own research but also establish partnerships with smaller pharmaceutical companies, helping them bring new drugs to market and enhancing its competitive edge.
See More
Nvidia's Earnings Report to Signal Market Direction
- Market Concentration Analysis: RBC Wealth Management's Rob Sluymer highlights that the concentration of mega-cap tech stocks has significantly increased over the past few years, leading to investors being overweight in these stocks, which have now declined about 7% year-to-date.
- Nvidia Earnings Preview: Nvidia is set to report its fourth-quarter earnings on February 25, and Sluymer believes this will serve as a crucial market indicator; if the results fall short of expectations, it could trigger a larger correction in tech stocks.
- Investor Sentiment Shift: As attention on tech stocks rises, Sluymer notes that some funds are rotating out of these high-valuation stocks into other sectors, a typical behavior in times of high market concentration.
- Future Market Outlook: Should Nvidia's earnings report disappoint, it may lead to a decline in market confidence in tech stocks, potentially resulting in a broader market correction that could impact overall investment strategies.
See More
Nvidia Poised for Strong GPU Sales in China Again
- Massive Market Opportunity: Nvidia has negotiated a deal with the U.S. government to resume GPU sales to China, with CEO Jensen Huang estimating the Chinese market could generate up to $50 billion annually, significantly boosting the company's performance.
- Sales Recovery Expectations: Before the ban, Nvidia projected $8 billion in sales from China for Q2 FY 2025; if sales return to similar levels, GPU sales could exceed $30 billion, presenting substantial growth potential.
- Revenue Growth Forecast: Wall Street anticipates Nvidia's revenue will reach $326 billion for FY 2027, but given the surge in AI computing spending, actual revenue could hit $350 billion, further enhancing market confidence.
- Strong Profitability: If Nvidia achieves $350 billion in revenue while maintaining a 56% profit margin, it could generate $196 billion in profits, and with a reasonable 40x earnings valuation, the stock price could rise to $322, indicating a compelling investment opportunity.
See More
Ray Dalio Warns of Global Capital War
- Capital Flow Warning: Billionaire Ray Dalio warns that the global capital flow system is breaking down, potentially leading to a 'capital war' that could significantly impact the stock market, especially given the current high levels of debt.
- Debt Crisis Concerns: The U.S. government's increasing debt and reduced foreign purchases of U.S. bonds may lead to soaring bond yields and higher borrowing costs, thereby affecting corporate financing capabilities.
- AI Investment Demand: The estimated $3 trillion required for AI development by 2030 is testing the limits of capital markets, and any systemic shock could lead to a depletion of available funding.
- Historical Lessons: Dalio's warning echoes past market crashes, particularly the role of debt in bursting bubbles, prompting investors to focus on stocks with strong cash flows to navigate potential market contractions.
See More
Strategies to Mitigate Market Risks
- Market Risk Management: In the current highly dangerous market environment, tech giants like Apple, Google, Amazon, Meta, and Nvidia are leveraging diversified product lines and innovative technologies to mask underlying market weaknesses, thereby enhancing investor confidence.
- Performance of Tech Giants: These companies exhibit a degree of resilience in financial performance, attracting investor attention despite increased market volatility, indicating their relative safety amid uncertainty.
- Investor Confidence: By maintaining continuous innovation and adaptability, these companies not only retain market share but also enhance investor confidence in the tech sector, reflecting their significance during economic turmoil.
- Future Outlook: Despite facing market challenges, the strategic positioning and financial robustness of these tech giants provide them with strong growth potential in future market recoveries, potentially leading the industry resurgence.
See More
AI Summit in India Attracts Tech Giants
- Market Validation: The AI Impact Summit in India has attracted CEOs from tech giants like Nvidia, OpenAI, and Alphabet, highlighting the global business community's recognition of India's market potential, which is expected to drive future investments and collaborations.
- Infrastructure Investment: With rising demand for AI data centers, significant infrastructure investment deals are anticipated, further solidifying India's position as a global hub for AI technology.
- Talent Attraction: India is regarded as an 'AI talent factory,' with over 60% of Global Capability Centers focusing on AI and data development, and 80% of new centers projected to be AI-led in the next six to eight months, indicating a strong demand for tech talent.
- Executive Position Growth: An increasing number of firms are establishing senior leadership roles, such as 'Chief AI Officer,' in India, reflecting a reliance on local talent and a focus on the AI sector, which enhances competitiveness in the global market.
See More
Eli Lilly Leverages AI to Transform Drug Development
- AI Platform Launch: Eli Lilly launched the TuneLab platform in September last year, allowing other drugmakers digital access to proprietary data on drug molecule performance, which saves significant time and money, enabling companies to focus on their best research projects.
- Major Investment Partnership: Eli Lilly partnered with Nvidia, committing $1 billion to build a supercomputer aimed at deepening disease understanding and advancing drug development, marking a significant step in the company's AI drug development efforts.
- Huge Market Potential: According to Straits Research, the AI-powered drug discovery industry is expected to grow at an annual rate of 30% through 2034, reaching over $20 billion, providing Eli Lilly with substantial future revenue opportunities.
- Increased Collaboration Opportunities: By owning a powerful drug development platform, Eli Lilly can not only optimize its own research but also establish partnerships with smaller pharmaceutical companies, helping them bring new drugs to market and enhancing its competitive edge.
See More
