Michael Burry, the investor famously portrayed in "The Big Short" for his accurate prediction of the 2008 housing market collapse, has reportedly taken a substantial short position against prominent AI stocks, including Nvidia and Palantir. Before closing his hedge fund, Scion Asset Management, in late 2025, regulatory filings disclosed put options against Nvidia and Palantir. He also allocated a significant portion, around 51%, of his disclosed portfolio to Molina Healthcare, a Medicaid-focused managed-care operator.
Burry's bearish stance on AI valuations is not merely commentary but backed by actual equity short positions. In a May 2026 post on his Substack newsletter, "Cassandra Unchained," he disclosed that up to 80% of his portfolio was allocated to put options on Nvidia and Palantir, representing an estimated notional value near $1.1 billion. Specifically, this included put options tied to 1,000,000 shares of Nvidia with a $110 strike price expiring in 2027, and a layered short position on Palantir with various strike prices and expiration dates.
His strategy involved shorting what he perceived as the market's most crowded story—AI infrastructure names like Nvidia, with a market capitalization of roughly $4.95 trillion and a price-to-sales ratio of 19.5, and Palantir, trading at elevated multiples. Conversely, he went long on Molina Healthcare, a company whose shares were down 34% over the past year and traded at a price-to-sales ratio of 0.2x. Molina Healthcare experienced an adjusted loss of $2.75 per share in Q4 2025, but its CEO projected over $11.00 per share of embedded earnings from new contracts between 2027 and 2029.
Burry has consistently warned of an "AI Bubble" and compared the current market exuberance around AI to the dot-com bubble of 1999-2000. He believes investors are ignoring economic data and global events, focusing myopically on AI. While he has acknowledged incorrect market forecasts in the past, he points to his accurate calls in 2000, 2007, 2019, 2021 (meme stocks), and 2023 (bank stocks) as evidence of his contrarian track record.
