Alex Karp blasts ‘Big Short’ investor Michael Burry as ‘bats--- crazy’ for bets against Palantir, Nvidia
News Summary
Palantir CEO Alex Karp vehemently criticized renowned “Big Short” investor Michael Burry, calling his short bets against Palantir and Nvidia “bats--- crazy.” This followed a filing revealing Burry’s fund had placed bets against the AI software and chip giants at the end of the last quarter. Karp stated in an interview that it’s “super weird” and “bats--- crazy” for Burry to short companies that are making money, particularly in the AI space. Despite Palantir beating Q3 estimates and offering upbeat guidance, its shares slid approximately 8% in premarket trading Tuesday, with Nvidia also falling over 2%. Burry’s hedge fund, Scion Asset Management, disclosed holding put options with a notional value of about $187 million against Nvidia and $912 million against Palantir as of September 30. This comes as investors have grown increasingly wary of lofty valuations in AI-linked names, with Palantir up 173% year-to-date and trading at a forward P/E of 228. Burry had previously hinted at renewed market caution in a cryptic post and is famous for his prescient bet against mortgage-backed securities before the 2008 financial crisis.
Background
Michael Burry is a renowned hedge fund manager, famous for his prescient bet against the US housing market prior to the 2008 financial crisis, a story chronicled in the best-selling book and Oscar-winning film “The Big Short.” His market calls and investment moves are therefore closely watched. Palantir Technologies is a leading provider of data analytics and artificial intelligence software, serving both government and commercial clients. Nvidia Corporation is a global leader in graphics processing units (GPUs), with its chips being critical for AI computing. Both companies have benefited significantly from the booming artificial intelligence sector, experiencing substantial surges in market capitalization and stock prices in recent years. Currently, global market enthusiasm for the AI sector is high, leading many related companies to reach historically elevated valuations. These high valuations have prompted concerns among some market observers and investors, including Burry, who suggest they might indicate an overheated market or a potential bubble risk.
In-Depth AI Insights
Is Burry's short bet on AI giants based on a long-term valuation misjudgment or a hedge against short-term market exuberance? - Burry is known for his deep fundamental analysis and insights into market irrationality. His current short position might not be a bearish view on AI technology itself, but rather a belief that Palantir and Nvidia's current valuations have detached from their intrinsic value or short-term growth potential, with prices already baking in excessively high expectations. This could be a macro-hedging strategy against an