"It seems quite risky to place a bet on either Palantir ( NASDAQ:PLTR) or Nvidia ( NASDAQ:NVDA) moving forward, given valuations and the high stakes, as investors fear and dread an AI bubble bust. Undoubtedly, Michael Burry has bearish bets against both AI darlings. But he's got more exposure to Palantir puts than Nvidia, likely because of the even hotter valuation and the potential for coming quarters to fall well short of expectations."
"As for Nvidia, it's the largest company on the planet, with ample catalysts in the new year. But until GPU sales fall off a cliff and buyers pass on Rubin, shares of Nvidia certainly do seem harder to short, at least in my opinion, especially when you consider that 24.5 times forward price-to-earnings (P/E) is nothing close to resembling a bubble."
"For now, Rubin is projected to be a hit and a major catalyst that could help Nvidia stock continue defying the odds. The hyperscalers are ready to spend, and there's probably going to be an arms race for the latest and greatest GPUs, especially when you consider the memory shortage and how it could incentivize backing up the truck whenever there's stock, perhaps in a similar manner as the toilet paper boom during the early days of the COVID pandemic."
Investing in Palantir or Nvidia carries significant risk given high valuations and fears of an AI bubble. Michael Burry holds bearish positions against both, with larger exposure to Palantir puts due to hotter valuation and risk of disappointing quarters. Nvidia benefits from scale and upcoming GPU catalysts like Rubin, and a 24.5 times forward P/E does not necessarily indicate a bubble absent earnings disappointments. Rubin and future GPUs could drive demand as hyperscalers rush to acquire limited memory-constrained inventory. Investor repositioning is occurring, exemplified by Chris Rokos buying Nvidia shares while selling Palantir, reflecting relative confidence in Nvidia's AI prospects.
Read at 24/7 Wall St.
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