Michael Burry is becoming more aggressive against three of the market’s biggest AI winners.
The Big Short investor has replaced outright bearish positions in Nvidia, Palantir and Micron with longer-dated put options extending into 2027, saying research pushed forward his timeline for an AI downturn.
The timing is contrarian, as Nvidia closed Tuesday at $239.24, valuing it near $5.8 trillion, Palantir ended at $192.07, and Micron at $1,045.56.
Burry’s thesis is not that AI demand disappears, but expectations may already leave too little room for disappointment.
Nvidia stock is Burry’s purest bet against AI expectations
Nvidia sits at the centre of the AI capital-spending cycle, which makes it the clearest test of Burry’s argument.
The stock is approaching a $6 trillion valuation, yet Wall Street remains bullish.
BNP Paribas analyst Karl Ackerman recently raised his target to $345, arguing Nvidia can sustain gross margins above 70% and maintain its dominant share of AI computing because of its hardware and CUDA software ecosystem.
That confidence is exactly what makes the bearish case interesting.
The risk is not necessarily collapsing GPU demand. It is whether hyperscaler capital spending can continue rising fast enough to support expectations already embedded in Nvidia’s price.
Panmure Liberum strategist Joachim Klement warned through MarketWatch that upcoming earnings and 2027 guidance could deliver an AI “reality check” if hyperscaler spending disappoints.
Burry is therefore betting against the valuation investors attach to Nvidia’s dominance, rather than the technology.
Palantir stock needs more than another strong quarter
Palantir offers the cleanest valuation argument of the three. The shares trade around $192; the average Wall Street target tracked by Investing.com is about $195.57, leaving little consensus upside despite strong growth.
Jefferies analyst Brent Thill remains an Underperform. “The setup gets harder from here,” Thill said, according to TipRanks, even after raising his target to $80 from $70.
Jefferies acknowledged Palantir’s accelerating US business, where revenue rose 115% last quarter, but argued comparisons become much tougher as expectations climb and international growth moderates.
That is where Burry’s positioning makes sense.
Palantir does not need to stumble operationally for the stock to fall. If investors have already priced in exceptional revenue growth, expanding margins and rapid AI monetisation, merely delivering good results may not be sufficient.
Micron stock looks cheap but memory remains cyclical
Micron is the most nuanced part of Burry’s trade because the stock looks inexpensive despite its rally.
Shares closed Tuesday at $1,045.56 and trade at 5.9 times forward earnings. The company just reported record revenue, an 87% adjusted gross margin and strong guidance as AI demand collides with tight memory supply.
Burry’s bearish thesis instead focuses on what happens when supply catches up.
He sees scarcity, rather than demand alone, as an important force behind memory pricing and expects new production capacity over the next two years to pressure the cycle.
Bank of America analyst Vivek Arya provides the bullish counterpoint. Memory prices and margins “will inevitably normalize at some point,” he said.
Arya still rates Micron Buy because he believes earnings could remain far above prior-cycle peaks even in a downturn.
That distinction captures Burry’s broader bet. Nvidia can remain dominant, Palantir can keep growing and Micron can stay profitable while their stocks still fall if expectations reset.
His puts are a wager against the price of perfection.
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