A Cool-Headed Look at the AI Frenzy: What Burry’s Short and Palantir’s Earnings Reveal

Background

Recently, market attention has turned to Michael Burry’s Scion Asset Management after disclosures showed large bearish bets on Nvidia (NVDA) and Palantir Technologies (PLTR). Burry, famed for his contrarian “Big Short,” allocated over 80% of his portfolio to put options on these two AI darlings—an unmistakable sign of skepticism amid the ongoing tech euphoria.

At the same time, Palantir’s latest Q3 earnings told a very different story. The company delivered strong results, with both revenue and profit exceeding expectations, while raising its full-year guidance. This contrast between Burry’s pessimism and Palantir’s performance underscores a key market tension—strong fundamentals vs. stretched valuations.

Commentary

From an investment perspective, AI-related stocks remain the market’s hottest theme. However, the widening gap between valuation and actual profitability has created a more divided sentiment. Institutional investors’ growing use of hedging strategies suggests a rising sense of caution toward the “AI miracle.” Without fresh catalysts or sustained earnings momentum, short-term volatility or corrections appear increasingly likely.

Overall, the AI industry still holds solid long-term growth potential, but the near-term market may favor companies with more stable fundamentals and reasonable valuations. For investors, rational stock selection and risk control are now more critical than chasing momentum.