Michael Burry's Nvidia Prediction Shakes Investors

Michael Burry, known for accurately predicting the bursting of the U.S. housing bubble in the mid-2000s, has once again made headlines in the financial world. This time, his bearish position on Nvidia and criticisms of Artificial Intelligence companies have resonated widely on social media.

Burry's recent moves may have influenced last week's stock market decline. The investor, known for his alarming predictions, returned to social media after a two-year hiatus, warning about a potential bubble in AI stocks.

According to a report by Business Insider, Burry's hedge fund, Scion Asset Management, held options betting on a decline for Nvidia (NASDAQ: NVDA) and Palantir (NYSE: PLTR) with a total value of $1.1 billion at the end of September. Some market observers approached Burry’s predictions with skepticism, especially after Nvidia shares rose by more than 5% following the company's third-quarter earnings results.

However, Nvidia stock dropped 3% at Thursday's market close and fell an additional 1% on Friday. This unexpected decline had a negative impact on the entire market, prompting some investors to support Burry.

Burry has not made a definitive statement regarding his options investment in Nvidia and did not confirm whether he profited from the Thursday sell-off. However, his prediction regarding Palantir is viewed positively, especially given that the stock price has dropped 25% since November 3rd.

Burry's predictions hold significance in the financial world, given his accurate forecasts during the 2008 financial crisis. With this latest investment, his criticisms of Nvidia and AI companies have had an impact, not only on social media but also on the stock market. This once again highlights the substantial influence leading investors can have on market trends and investor sentiment.