Michael Burry Is Betting Against These 4 AI Stocks. Is He Right?
Key PointsBurry is concerned about Nvidia's circular financing and chip depreciation methods.
Michael Burry, the investor who correctly predicted the 2008 mortgage crisis and made a fortune, has recently been critical of the artificial intelligence (AI) industry. He has been shorting four AI stocks: Nvidia, Palantir Technologies, Tesla, and Micron Technology. Burry first disclosed his Nvidia puts in the first quarter of 2025, comparing the current AI situation to the dot-com bubble that burst in 2000.
He argues that Nvidia's chips are not being depreciated properly and will have a shorter usable lifespan than anticipated. He also points out Nvidia's circular financing, where the company has mutually beneficial relationships with other companies and is using its chips. Burry compared Nvidia to Cisco, stating that while Enron was a shell company, Cisco's business dried up after the dot-com bust.
Burry has also put puts on Palantir, Tesla, and Micron Technology. He believes Palantir is wildly overvalued, with its fundamental value being less than $50 per share. Palantir's stock has fallen earlier this year but is back up amid demand for its Artificial Intelligence Platform (AIP) from U.S. businesses. Burry bought new Tesla puts in June of this year, calling it "ridiculously overvalued" and noting that the company's net income declined by 60% last year.
Micron is considered cheap, trading at only 12 times trailing-12-month sales, but Burry warns that the memory cycle will blow off soon as production catches up, leading to a down cycle again.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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