Michael Burry of 'Big Short' fame discloses bets against Palantir and Nvidia
Investor Michael Burry disclosed on Monday that his hedge fund, Scion Asset Management, has taken positions against tech heavyweights Nvidia (NVDA) and Palantir (PLTR).
Burry, who rose to fame for correctly predicting the US housing market bubble and subsequent stock market crash in 2008, has taken out puts — or trades that benefit from a stock price falling — on two of Big Tech’s darlings.
Palantir raised its full-year revenue outlook to $4.4 billion and beat estimates for third quarter revenue, but the company’s shares fell as much as 7% early Tuesday amid questions about the stock’s valuation. Shares initially rose as much as 7% late Monday following the initial release of the numbers.
Shares in Nvidia, which will report earnings on Nov. 19, fell by more than 2% in the first hour of trading on Tuesday before paring some of those losses. In an interview with CBS News on Sunday, President Trump said the US would not allow Nvidia to sell its top-of-the-line chips to Chinese buyers as a matter of national security.
Michael Burry initially rose to fame for rightly predicting that the US housing market would crash ahead of the 2008 financial crisis. Burry’s role in Michael Lewis’ 2010 book, “The Big Short,” memorialized his status among investors who foresaw America’s housing bubble. Burry was later portrayed by Christian Bale in the 2015 film of the same name.
Scion Asset Management today manages roughly $155 million in assets, according to the firm’s latest regulatory filings. Hedge funds are not required to disclose their investors.
Burry, widely known to be a contrarian investor, jumped into the ongoing debate last month on whether the market is in a bubble.
“Sometimes, we see bubbles. Sometimes, there is something to do about it. Sometimes, the only winning move is not to play,” Burry said in an X post in late October, adding to the post a screengrab of Bale playing Burry in “The Big Short.” The tech-heavy Nasdaq Composite (^IXIC) gained more than 20% this year as AI stock valuations have soared.
Burry’s username on X is “Princess Cassandra,” a likely reference to the figure from Greek mythology who was said to have predicted the fall of Troy.
In the second quarter of 2021, Burry’s fund disclosed put options on Tesla (TSLA), betting that shares in the Elon Musk-led carmaker would fall. While the stock would eventually fall throughout 2022, Tesla’s share price more than doubled within the six months after Burry disclosed his position.
In May, Scion Asset Management doubled its bullish position on the French beauty behemoth Estée Lauder (EL). The stock has since rallied by more than 40% in the months since.
Burry’s bearish market outlook and puts on Palantir and Nvidia, the world’s most valuable company, line up with recent market predictions from Wall Street leaders — from Goldman Sachs’ David Solomon to Morgan Stanley’s Ted Pick — that investors should brace for a course correction on hyperinflated valuations over the next several months.
Jake Conley is a breaking news reporter covering US equities for Yahoo Finance. Follow him on X at @byjakeconley or email him at jake.conley@yahooinc.com.
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