Michael Burry's Palantir Puts: Bubble Warning?

Alright, let's dissect Michael Burry's latest move. Word on the street is he's gone super-bearish on Palantir (PLTR), loading up on five million put options. And he's not alone; Nvidia (NVDA) also gets the Burry treatment with a million puts. The immediate reaction, of course, is to assume Burry's crystal ball is working overtime again. But let's hold on a second and look at what the numbers actually tell us.

Scion's Portfolio Shuffle

First off, the sheer size of these positions is eye-catching. Whale Wisdom puts the market value of the Palantir puts at $912.1 million and the Nvidia puts at $186.58 million. That's a significant chunk of change, even for a fund like Scion Asset Management. But context matters. Burry also made some bullish moves, adding Lululemon (LULU), Molina Healthcare (MOH), and SLM Corp (SLM) to his portfolio. He even bought calls on Halliburton (HAL) and Pfizer (PFE).

So, is Burry predicting doom and gloom, or is he just rebalancing his portfolio? The narrative of "impending crash" is sexier, sure, but the reality is often more nuanced. He also closed positions in companies like Estee Lauder, Regeneron, MercadoLibre, and UnitedHealth Group. What does that tell us?

Burry's return to X (formerly Twitter) adds another layer to the puzzle. His AI bubble warning, complete with Star Wars references ("These aren't the charts you are looking for"), is classic Burry. He posted charts comparing cloud growth from 2018-2022 to the present and highlighting the web of AI deals. He even threw in a chart showing AI capex mirroring the tech spending of the late 90s tech bubble. Is he right? Maybe. But extrapolating from past bubbles isn't a foolproof strategy.

The "Cassandra Unchained" Angle

Then there's the whole "Cassandra Unchained" persona. Changing his profile to reference the cursed prophetess who was always right but never believed? That's not exactly a subtle signal. And the header image, a "Satire of Tulip Mania," is about as subtle as a foghorn.

He's drawing parallels between the current AI hype and historical bubbles. The question is, how accurate is the comparison? While there is froth in the market (look at any headline about AI-powered dog-walking apps), the underlying technology is fundamentally different from, say, Beanie Babies.

I've looked at hundreds of these filings, and the aggressive way he’s telegraphing his position is unusual. Is it calculated theatrics to amplify his message, or is he genuinely concerned? (Or both?)

Back in the summer, there was talk that Burry was turning more bullish, swapping bearish puts for bullish calls. Peter Mallouk of Creative Planning even said he'd "gone from a strong conviction bet on a sector fall to a broad-based bet the bull run will continue." But now? He's back to the bearish playbook. The market is a fickle beast, and Burry is clearly trying to stay ahead of the curve – or at least appear to be. The initial interpretation from many was wrong.

Details on the exact strike prices and expiration dates of Burry's put options are, understandably, not public information. That's a gap in the data we have to acknowledge. Without those details, we can't fully assess the risk/reward profile of these positions. The market value of $912.1 million is based on current prices, not the prices Burry paid.

And this is the part of the report that I find genuinely puzzling. The market's infatuation with AI is undeniable, but Palantir's financials—specifically their reliance on government contracts—aren't exactly a secret. Is Burry betting against the company's long-term prospects, or is he simply exploiting a short-term valuation bubble? Michael Burry Is Super-Bearish On Palantir — With 5 Million Puts - Palantir Technologies (NASDAQ:PLTR)

So, What's the Real Story?

Burry's not just making a calculated bet; he's staging a performance. The puts on Palantir and Nvidia are significant, sure, but the "Cassandra Unchained" act is what's really grabbing headlines. The question isn't just whether he's right or wrong, but whether this is a genuine warning or just another chapter in the Michael Burry mythos.