{
  "id": 3375314,
  "title": "I Dug Into Michael Burry’s Nvidia Post So You Don’t Have To. Here’s Why I Think He’s Just Fishing.",
  "url": "https://urgent.news/2026/08/24/i-dug-into-michael-burrys-nvidia-post-so-you-dont-have-to-heres-why-i",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-08-24T16:02:35.000Z",
  "source": {
    "name": "Yahoo Finance",
    "slug": "yahoo-finance",
    "url": "https://finance.yahoo.com/markets/stocks/articles/dug-michael-burry-nvidia-post-160235766.html"
  },
  "original_language": "en",
  "account": "When Michael Burry decided to bet against Nvidia's stock, he wasn't targeting the company's groundbreaking technology. Instead, Burry was wagering against the artificial intelligence financing landscape and broader economic conditions. It's now evident that Burry is losing on this bet, as Nvidia's stock is inching closer to all-time highs. However, the short-seller isn't lying dormant with his position. In fact, Burry recently shared insights about a startup, Etched, which could potentially challenge Nvidia's market dominance.\n\nEtched, founded by a group of Harvard alumni, is developing a specialized chip named Sohu. This chip is designed to run transformer models, the backbone of most contemporary artificial intelligence systems. By concentrating on inference tasks — the portion of AI computations where the workload is the highest — Etched claims its chip can deliver faster and more cost-effective AI inference compared to Nvidia's general-purpose graphics processing units (GPUs). The startup recently secured substantial funding, achieving a valuation of $21 billion.\n\nTo understand why startups like Etched are emerging, it's essential to grasp the intricacies of AI operations. There are two primary stages in AI processing: training, which involves teaching the model, and inference, which is when the model responds to queries. Inference is where the computational demand surges as AI applications proliferate. Specialized chips like those from Etched or other custom silicon solutions from tech giants such as Amazon (AMZN), Alphabet (GOOGL), and Broadcom (AVGO) can compete effectively in this area. Although Nvidia leads in AI computing, inference represents a domain where specialized chips can challenge the status quo. This is why interest in these potential disruptors continues to grow.\n\nAt Nvidia's last earnings call, CEO Jensen Huang strongly defended the company's position in AI infrastructure manufacturing. He asserted that creating AI infrastructure is inherently challenging, and most custom-chip ventures rarely transition into practical production. Thus far, Nvidia's dominance in the AI chip market has remained intact. The company is scheduled to release its Q2 fiscal 2027 earnings on August 26, and investors will closely monitor whether Nvidia's inference business continues to expand at a rate sufficient to maintain its competitive edge. Startups like Etched are generating significant buzz. However, the outcome of these earnings will reveal whether these companies are genuine threats or merely a media sensation. Nvidia's stronghold in the AI chip market is unlikely to wane anytime soon because competing against Jensen Huang requires not only technical prowess but also access to crucial manufacturing capacity. The global semiconductor supply chain is akin to a complex chessboard, with major players relentlessly vying for the limited production resources available. No startup can simply place an order with a company like Taiwan Semiconductor (TSM) for capacity that is already allocated to multinational conglomerates. Consequently, when Burry claims that Etched poses significant competition to Nvidia, he's essentially casting a wide net. The technology showcased by Etched is impressive, but it doesn't undermine Nvidia's position or facilitate any efforts to short Nvidia's leading chip designer. Nvidia is a prominent technology firm that engineers advanced computer chips, AI systems, and software utilized across diverse industries worldwide. Its operations span two segments: Compute & Networking and Graphics. The Compute segment offers AI chips, data-center hardware, networking products, and software driving artificial intelligence, cloud computing, and autonomous vehicles, while the Graphics segment manufactures gaming GPUs and professional graphics cards catering to gamers, content creators, and enterprise workstations. Established in 1993, Nvidia is headquartered in Santa Clara, California. NVDA stock experienced considerable volatility in 2026, soaring from a low of $164 in late March to a 52-week high of $236.54 on May 14, before dropping to around $190 by the end of July. Over the past year, Nvidia has gained approximately 18%, trailing behind the iShares Semiconductor ETF's (SOXX) gain of 101% during the same period. Despite this underperformance, NVDA stock appears relatively reasonable compared to its historical averages. The forward price-to-earnings (P/E) ratio trades at 25.1 times, significantly below its five-year average of around 52 times. The price-to-sales (P/S) ratio also stands at 24.3 times. These valuations are particularly striking given Nvidia's central role in the AI boom. Analysts anticipate earnings growth of 92% in fiscal 2027 and 43% in fiscal 2028, which, while decelerating, remains robust for a company of this magnitude. Additionally, Nvidia's balance sheet is strong, with the company being deeply net cash-positive. While Nvidia is the world's most valuable company, its current stock valuation may appear more modest than its historical norms. The competition from custom chips and startups like Etched is a risk worth watching, as the case for Nvidia's continued dominance hinges on sustained growth in this area. However, as long as this growth materializes, Nvidia's stock may not be as expensive as its size suggests. Nvidia reported first-quarter fiscal 2027 earnings on May 20, reporting revenue of $81.6 billion, a 85% year-over-year increase. Data-center revenue, which made up $75.2 billion, also surged by 92% year-over-year. EPS exceeded Wall Street's consensus of $1.77, coming in at $1.87. The company's gross margin for the quarter was 74.9%, and free cash flow stood at $48.6 billion, up from $34.9 billion in Q4 2026. Nvidia's Q2 fiscal 2027 earnings are set to be disclosed on August 26.",
  "summary": null,
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}