Michael Burry's Scion Asset Management Takes Bearish Positions on Nvidia and Palantir

Hedge fund manager Michael Burry's Scion Asset Management has disclosed substantial put options against Nvidia and Palantir, signaling a bearish stance on these prominent AI companies. According to the latest 13F regulatory filing, Scion holds put options on approximately 5 million shares of Palantir, valued at $912 million, and 1 million shares of Nvidia, worth $186 million. These positions constitute about 80% of Scion's $1.38 billion portfolio.

Put options grant the holder the right to sell shares at a predetermined price before a specified date, typically profiting when the underlying stock's price declines. Burry's significant bearish bets suggest he believes Nvidia and Palantir may be overvalued following their substantial rallies this year. Year-to-date, Palantir's stock has surged over 170%, while Nvidia's has risen by 54%.

In pre-market trading, Palantir's shares fell more than 7%, and Nvidia's declined nearly 2%, following the disclosure of Scion's positions. Burry, renowned for predicting the 2008 housing market crash, has recently expressed concerns about a potential AI bubble, drawing parallels to the dot-com era's excesses.