"The Big Short" Burry takes action: $1.1 billion short positions target two major AI giants!

"Big Short" investor Michael Burry has put big money behind his warnings of a market bubble.

According to a quarterly regulatory filing released Monday for the period ending September 30, Burry's Scion Asset Management made massive bearish bets on Nvidia (NVDA) and Palantir Technologies (PLTR) through put options (contracts that profit when stock prices fall).

Scion disclosed that it holds put options equivalent to 1 million shares of Nvidia, valued at approximately $186.6 million; it also holds put options equivalent to 5 million shares of Palantir, valued at approximately $912 million.

This filing only reflects last quarter's trading activity, and Scion's current holdings may differ from the disclosed information.

Burry's bets come against the backdrop of investors' fervent pursuit of artificial intelligence (AI). As an AI chip giant and the world's first company to reach a $5 trillion market cap, Nvidia's stock has risen 54% this year, continuing a three-year rally driven by surging demand for AI hardware. The stock closed up 2.2% on Monday. Meanwhile, fueled by the AI boom and increased defense spending, AI data analytics company Palantir's stock has soared 174% this year. The stock closed up 3.4% on Monday, but fell 4.3% in after-hours trading following its earnings report.

In the previous quarter, Scion did not hold any positions in these two companies, indicating a strategic shift in Burry's portfolio.

A few days before this holdings disclosure, Burry broke his more than two-year silence on social platform X, posting a warning message and subsequently sharing several charts to support his view that the tech sector is accumulating a bubble.

He wrote in his post at the time, "Sometimes, we can see the bubble. Sometimes, we can act on it. But sometimes, the only winning move is not to play."

On the social platform Stocktwits, as of Tuesday morning, retail sentiment toward Nvidia had cooled from "extremely bullish" the day before to "bullish." Although the volume of discussions about Nvidia on the platform declined over 24 hours, it remained "high." On the other hand, as of Tuesday morning, retail sentiment toward Palantir remained "extremely bullish," with discussion heat rising to "very high" levels.

Burry rose to fame for successfully predicting and profiting from the 2008 U.S. housing market crash. His massive short bet against the housing bubble was chronicled in the book and film "The Big Short."

Scion's disclosure comes as debate intensifies over whether the "AI boom has pushed stock market valuations into bubble territory"—with both the S&P 500 Index (SPX) and Nasdaq 100 Index (NDX) reaching all-time highs.

Although Burry is bearish on Nvidia and Palantir, he has taken bullish option strategies on oilfield services company Halliburton (HAL) and pharmaceutical giant Pfizer (PFE).

Scion also holds shares in athletic apparel maker Lululemon (LULU), scientific instrument manufacturer Bruker (BRKR), health insurance company Molina Healthcare (MOH), and student loan provider SLM Corporation (SLM).

As of the end of September, Scion held a total of eight investment positions, down from 15 at the end of June. According to the latest regulatory filing, as of March, the company managed approximately $155 million in assets.