Michael Burry Disclosed Put Options Worth an Estimated $1.1 Billion Against Nvidia and Palantir Before Closing His Hedge Fund. Was That Bearish Bet Ahead of Its Time?

Michael Burry maintained bearish exposure to Palantir and Nvidia after Scion Asset Management previously disclosed Palantir puts with $912 million notional value and Nvidia puts with $186,580 notional value. He sold December-expiring puts but retained short positions in both names and Palantir puts expiring in 2027, while trimming his portfolio to raise cash and reduce risk. Burry argues Palantir's valuation above 100x earnings is unsustainable despite strong growth, and cites Nvidia's hyperscaler customer concentration as a downside risk if AI capital spending slows.

Analysis

The actionable signal is not the celebrity short but the asymmetry between PLTR and NVDA. PLTR’s valuation is most vulnerable to any deceleration in U.S. commercial customer additions, net-revenue retention, or forward margin guidance; its multiple leaves little room for merely good execution. NVDA has a more credible earnings base, but its equity duration remains highly sensitive to hyperscaler capex guidance and the pace at which inference demand converts from pilots into recurring GPU consumption.

Near term (days to weeks), public discussion of a large bearish options position is more likely to raise implied volatility than alter fundamentals, particularly because the underlying premium, strike, and position changes in a personal account are not independently observable. This favors avoiding outright common-stock shorts after weakness. Over 1-3 months, the relevant catalyst is the next capex/guidance cycle from MSFT, AMZN, GOOGL and META: a broad capex reaffirmation would likely squeeze AI shorts, while a single major customer emphasizing capacity digestion could compress NVDA’s revenue-duration multiple and spill into AMD, AVGO and AI infrastructure ETFs.

The contrarian case is that a valuation reset need not produce a sustained NVDA decline: lower GPU pricing or a capex pause could accelerate adoption among sovereign, enterprise and smaller-cloud buyers, preserving unit demand while shifting the customer mix. PLTR has less such cushion because its upside narrative depends on software deployment velocity, not just industry-wide compute volume. The more attractive bearish expression is therefore PLTR relative to NVDA, with defined-risk options rather than directional short exposure.

Key Decisions for Investors

• Initiate a 3-6 month PLTR/NVDA relative-value short: short PLTR against a smaller NVDA short or long NVDA hedge, sized beta-neutral. Thesis is PLTR multiple compression on any commercial-growth or margin-guide miss; cover if PLTR reaccelerates customer additions and raises full-year revenue guidance.
• For outright PLTR downside, prefer 6-12 month put spreads rather than shares short; enter only if implied volatility is below its post-earnings range. Target a 2:1 payoff profile and cap premium at a pre-defined portfolio risk budget; do not use short-dated puts where theta dominates absent a dated earnings catalyst.
• Maintain NVDA as a watch-item, not a fresh outright short, until hyperscaler earnings provide evidence of capex digestion or inventory normalization. A collective capex-guide reduction from two or more major customers would justify buying 3-6 month NVDA put spreads and selectively shorting AMD/SMH beta.
• Use a catalyst dashboard: MSFT, AMZN, GOOGL and META capex guidance; NVDA data-center revenue growth and gross-margin outlook; PLTR U.S. commercial customer growth and remaining-deal-value trends. A continued capex upgrade cycle or PLTR guidance raise falsifies the near-term bearish setup.