Michael Burry's $1B Short Bet Sparks AI Stock Plunge and Market Jitters

Famed investor Michael Burry, through Scion Asset Management, has placed a $1 billion short position against leading artificial intelligence stocks, specifically $912 million against Palantir and $187 million against Nvidia, as disclosed in recent SEC filings. This move triggered immediate market reactions, with Palantir's stock plunging 6% on Tuesday, November 4, 2025, and Nvidia shares falling over 2% in pre-market trading.

Burry returned to social media after a two-year hiatus, posting a cryptic warning about market bubbles and sharing charts comparing current U.S. technology spending growth to levels seen during the late-1990s dot-com bubble. His bearish stance overshadowed Palantir's strong quarterly results, which included beating revenue and earnings expectations, raising full-year guidance, and crossing $1 billion in revenue for the second consecutive quarter.

Palantir CEO Alex Karp responded vehemently on CNBC, accusing short sellers of "market manipulation" and calling the trades "super triggering." He asserted, "We delivered the best results everyone, anyone’s ever seen," but shares continued to slide post-comments. Analysts highlighted valuation concerns, noting Palantir's forward price-to-earnings (P/E) ratio of 254 far exceeds Nvidia's 35 and Oracle's 35, with Goldman Sachs' Gabriela Borges pointing out that Palantir's stock had already surged 175% year-to-date, making mere beats insufficient for gains.

The selloff extended to the broader market, with the S&P 500 falling 0.9%, the Nasdaq losing 1.5%, and the Dow dropping 193 points. AI stocks like Oracle, AMD, and Amazon also declined, amid warnings from Wall Street executives. Goldman Sachs CEO David Solomon predicted a 10% to 20% stock drop over 12-24 months, while Morgan Stanley's Ted Pick foresaw 10% to 15% drawdowns.

In related developments, Google partnered with Coinbase to launch an AI payments protocol, and Pi Coin announced new AI investments, reflecting the growing intersection of AI and cryptocurrency sectors.