Michael Burry, the investor who correctly predicted the 2008 US housing crisis, still thinks NVIDIA is a "heck of a trade," even after its CEO Jensen Huang admitted to an affair with someone suspected of being a Chinese spy.
That news sent NVIDIA's value down by $430 billion in just two days, but Burry believes the company itself won't be seriously affected and has sold his December 2026 puts on NVIDIA and Palantir entirely to avoid rapid time-based decay, while pulling back on exposures across the portfolio.
Michael Burry warns AI stocks overpriced
Even though he sees short-term potential in NVIDIA, Burry warns that AI stocks like this might be overpriced, reminding everyone of past market bubbles.
He's also concerned that NVIDIA could lose its competitive edge within five years, so he keeps tweaking his portfolio to stay protected if things get shaky in the AI world.