Deep Tide Introduction: As the Nasdaq Index hits consecutive record highs and NVIDIA's market cap approaches $5.3 trillion, Michael Burry, famous for betting against subprime mortgages during the 2008 financial crisis and the real-life inspiration for the film "The Big Short," is placing counterintuitive bets.
He not only maintains bearish positions on NVIDIA and Palantir but has also expanded his shorting scope to include a semiconductor ETF and a Nasdaq ETF. Simultaneously, he is buying traditional software stocks battered by the AI narrative, constructing a complete portfolio betting on an "AI Bubble Repricing."
The Nasdaq Composite set fresh all-time highs this week, closing at about 26,247 points on May 8th, with the S&P 500 also hitting a record on the same day. The Philadelphia Semiconductor Index has risen approximately 55% since Q2, NVIDIA's stock price nears its all-time high of $217.80, and its market cap has surpassed $5.2 trillion. The AI-driven tech stock frenzy is at its peak.
Yet, at the market's most exuberant moment, an investor renowned for his contrarian bets is significantly increasing his wager in the opposite direction.
According to a Foreign Policy Journal report on May 7th, hedge fund manager Michael Burry, who predicted the 2008 subprime crisis and was portrayed in "The Big Short," disclosed his latest portfolio adjustments this week in his Substack column "Cassandra Unchained":
He not only maintains put options on NVIDIA and Palantir but has also added a direct short position on Palantir and expanded his bearish bets on the semiconductor ETF (SOXX), the Nasdaq 100 ETF (QQQ), and Oracle.
At the same time, he has begun buying a basket of traditional software companies marginalized by the AI boom, such as Adobe, Autodesk, Salesforce, and Veeva Systems, reasoning that their stock price declines stem from panic selling rather than deteriorating fundamentals.
Thus, a complete "Big Short" hedging portfolio emerges, with a core logic of shorting AI beneficiaries and going long AI casualties.
Starting from the $1.1 Billion Bet Last November
Burry's shorting of the AI sector began in Q3 2025.
At that time, the 13F filing for his hedge fund Scion Asset Management showed he had purchased put options on Palantir with a notional value of approximately $912 million and on NVIDIA with a notional value of about $187 million. This news, revealed in November last year, caused a stir in the markets, putting pressure on Palantir and NVIDIA's stock prices.
However, Burry later clarified on platform X that his actual capital outlay was around $9.2 million, not the widely reported $912 million—the latter being the notional value of the options contracts, a difference of nearly a hundredfold. This detail is crucial: the notional value in 13F filings is often misconstrued as actual invested capital, thereby exaggerating the trade size.
Soon after the disclosure, Burry announced the closure of Scion Asset Management and its deregistration with the SEC, ending his career of managing external capital.
He subsequently transitioned to being a personal investor and began publishing market analyses in his Substack column named "Cassandra Unchained" (Cassandra is the Greek mythological prophetess who foretold truths but was never believed).
Palantir Short Shows Results, Burry Says 'Not Enough Decline'
Judging by trading outcomes, Burry's Palantir bet is currently profitable. Palantir's stock price has fallen from around $161 when he entered to about $137 currently, down roughly 34% from its 52-week high of $207. Despite the company recently releasing strong Q1 2026 earnings (revenue up 85% year-over-year), its stock price fell post-earnings.
Burry has not taken profits. According to his Substack disclosure, he currently holds put options expiring in December 2026 with a $100 strike price, and others expiring in June 2027 with a $50 strike price, indicating he expects Palantir to fall more than 60% from current levels within the next year.
He explicitly stated in a post that Palantir's fair valuation is only in the "single-digit to low double-digit" range.
In April this year, Burry wrote on Substack that Anthropic is "eating Palantir's lunch," pointing out that this AI safety company's revenue growth has exceeded a $30 billion annualized run rate, and its more user-friendly, lower-cost AI integration tools are replacing Palantir's complex enterprise deployment solutions.
After this post was published, Palantir's stock price fell 13.7% within a week. Burry later deleted the post. Wedbush analyst Dan Ives dismissed this view as "fictional narrative," and Palantir CEO Alex Karp had previously publicly stated he "couldn't understand" Burry's short stance.
NVIDIA Short Still Losing, But Burry Insists 'AI Is a Bubble'
Compared to the victory with Palantir, Burry's situation with NVIDIA is starkly different.
NVIDIA's stock closed around $215 on May 8th, nearing its all-time high of $217.80, with a market cap of approximately $5.3 trillion. It is reported that Burry holds NVIDIA put options with a $110 strike price expiring in December 2027, which are currently deeply in the red. Yet he has not reduced his position; instead, he has added to it in his recent portfolio adjustments.
Burry's core logic for shorting NVIDIA is "overbuilding of AI infrastructure." In his first Substack article last November, he compared the current AI investment frenzy to the dot-com bubble of the late 1990s, likening NVIDIA to Cisco back then. Cisco's stock rose 3,800% between 1995 and 2000, briefly becoming the world's most valuable company, before plummeting over 80% after the dot-com bust.
Burry's key arguments include: Hyperscale customers like Microsoft, Google, Meta, Amazon, and Oracle are extending GPU depreciation periods to beautify their financial statements; by his estimate, these accounting practices will cumulatively understate depreciation expenses by about $176 billion between 2026 and 2028, inflating profits across the industry.
Furthermore, he argues that the massive capital expenditure on current AI infrastructure is built on overly optimistic demand forecasts, mirroring the situation when telecom companies frantically laid fiber optic cables around the year 2000.
This viewpoint prompted direct pushback from NVIDIA. According to CNBC, NVIDIA privately circulated a seven-page memo to Wall Street sell-side analysts, refuting Burry's claims point by point, specifically citing his X platform posts as a source of information needing rebuttal.
In the memo, NVIDIA stated its customers set GPU depreciation periods at four to six years based on actual useful life, and early products (like the A100 released in 2020) still maintain high utilization. Burry responded, "I'm not saying NVIDIA is Enron," but stood by his analysis.
Going Long Software Stocks Pressured by AI: A Complete Bubble Hedge Portfolio
Perhaps the most noteworthy aspect of Burry's portfolio adjustment is not the shorts themselves, but his long positions.
He recently bought stocks like Adobe, Autodesk, Salesforce, Veeva Systems, and MSCI. The common trait of these companies is: their business fundamentals remain solid, but their stock prices have been severely beaten down by market narratives of "being disrupted by AI" and forced selling by private credit funds.
Adobe is currently down about 30% from its 52-week high, Autodesk has fallen roughly 22% year-to-date, and both have seen their forward P/E ratios retreat to 2018-2019 levels.
Burry explained on Substack that he "does not believe the technical selling pressure from private credit and software debt is enough to affect these stocks in the long term." In other words, he believes the market has overly punished companies labeled "AI losers" and overly rewarded those labeled "AI winners"—and he is betting on a correction of this mispricing.
Looking at the short and long sides together, Burry has constructed a classic long-short hedge portfolio: If the AI bubble narrative bursts, high-valuation beneficiaries like NVIDIA and Palantir will bear the brunt, while mispriced traditional software stocks could see a valuation recovery. Even if the overall market declines, this structure has the potential to achieve positive returns.
In his letter to investors when closing Scion, Burry admitted: "My judgments on the value of securities have been out of sync with the market for a long time." This statement is both self-reflection and a declaration of his consistent stance.
At the peak of the AI frenzy, he chooses to stand opposite the crowd.
