"Shares in two closely watched AI-adjacent companies, Nvidia Corporation and Palantir Technologies, are falling this morning. Currently, Nvidia shares are down more than 2.2% and Palantir shares are down more than 6%. The share price drops of two of the most prominent AI companies come as investors seem increasingly worried that the AI boom is starting to look more like an AI bubble, reminiscent of the dotcom bubble of the late '90s and early 2000s."
"In the years leading up to the 2008 housing market crash, investor Michael Burry made a killing by shorting housing-related stocks after seeing signs of the then-upcoming housing market crash that few others noticed. In 2015, Burry was immortalized in The Big Short, the Oscar-winning film about the 2008 financial crash, in which he was played by Christian Bale. Burry has since gained a substantial following among some investors, and so his investment moves often gain widespread attention."
"As noted by Bloomberg, Bury's Scion Asset Management recently revealed in a 13F regulatory filing that it bought put options on NVDA and PLTR. The news of Scion's puts followed a Halloween post from Burry on X in which the hedge fund manager issued a cryptic post reading "Sometimes, we see bubbles. Sometimes, there is something to do about it. Sometimes, the only winning move is not to play," along with an image of his Big Short character played by Bale."
Nvidia and Palantir shares fell this morning, with Nvidia down more than 2.2% and Palantir down over 6%. Growing investor concern suggests the AI boom may be taking on bubble-like characteristics similar to the late-1990s dotcom era. Increasing numbers of investors have begun betting against companies benefiting from AI gains. Michael Burry, known for shorting housing before 2008, bought put options on NVDA and PLTR through Scion Asset Management, disclosed in a 13F filing. Burry posted a cryptic message on X about bubbles, and his puts appeared to strike a nerve with Palantir CEO Alex Karp. Market reaction reflects heightened skepticism about valuations and sustainability of rapid AI-driven gains.
Read at Fast Company
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