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Michael Burry’s final bet: A $1B gamble against AI giants before shutting down

The *Big Short* legend’s last trade was a $1B wager against AI darlings. Did he spot another crash—or misread the stock market again?

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2 min read
In the right side there are people in the market, it's a sunny sky in the market.
In the right side there are people in the market, it's a sunny sky in the market.

Michael Burry’s final bet: A $1B gamble against AI giants before shutting down

Michael Burry, the investor famous for predicting the 2008 financial crisis, has shut down his hedge fund, Scion Asset Management. His final move before closing involved a massive bet against two major AI stocks. The decision follows years of warning about market bubbles and unsustainable trends in the stock market today.

Burry’s career has been marked by high-profile calls, including his early bet against the housing market, which earned him and his investors hundreds of millions. Now, his latest wager targets companies at the heart of the AI boom—Nvidia and Palantir—reflecting his scepticism about their sky-high valuations in the stock market today.

Burry first gained widespread recognition after profiting from the 2008 collapse. By shorting mortgage-backed securities, he made $100 million for himself and $700 million for his investors. His story was later featured in The Big Short, with Christian Bale portraying him in the film adaptation.

Over the years, he has repeatedly warned about overvalued sectors, particularly in tech, in the stock market today. His bearish predictions, however, have sometimes backfired when markets rallied, hurting his short positions. This time, his final letter to investors revealed a bold move: put options worth $187 million against Nvidia and $912 million against Palantir. Together, these bets made up roughly 80% of his portfolio, signalling a strong belief that the AI sector is dangerously overinflated in the stock market today.

His decision to deregister Scion Asset Management from SEC reporting highlights his frustration with AI-driven market valuations in the stock market today. Short selling has always been risky, as stocks tend to rise over time, making it harder for bearish investors to succeed. Burry’s latest actions suggest that fighting the market’s momentum can be costly, even for those with a proven track record.

The move also underscores the challenges of maintaining a hedge fund focused on contrarian bets in the stock market today. While Burry’s past successes cemented his reputation, his recent struggles show how difficult it is to consistently profit from short positions in a market that often rewards optimism over caution in the stock market today.

Burry’s closure of Scion Asset Management marks the end of an era for one of Wall Street’s most prominent contrarians. His final trades—heavy bets against Nvidia and Palantir—reflect his long-standing scepticism of market excesses in the stock market today. The outcome of these wagers will determine whether his latest prediction proves as prescient as his 2008 call or another costly misstep in a market that continues to defy bearish expectations in the stock market today.

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