Legendary investor Michael Burry is making headlines again—and this time with his most aggressive bearish stance in recent memory. Burry’s hedge-fund firm, Scion Asset Management, has reportedly purchased approximately 5 million put options on Palantir Technologies (PLTR), signaling a bet valued at nearly $1 billion against the artificial-intelligence analytics company. This bold move follows his recent warnings about excessive market speculation and inflated valuations in the technology sector.
Michael Burry’s Bearish Bet Against Palantir
Recent filings and financial reports indicate that Scion Asset Management holds put options tied to around 5 million shares of Palantir, worth roughly $912 million. This type of position represents a wager that Palantir’s stock price will decline in the near future.
Palantir, known for its high-profile contracts with the U.S. government and defense agencies, has been one of the standout names in the AI analytics boom. Its strong stock performance over the past year reflects growing investor enthusiasm about artificial intelligence and data-driven software solutions. However, Burry’s bet suggests skepticism about the company’s ability to maintain its current valuation amid increasing competition and broader market volatility.
This isn’t the first time the famed “Big Short” investor has taken a contrarian position. Earlier in 2025, Burry also made significant bearish bets against tech giants, including Nvidia and select Chinese tech stocks. His Palantir move appears to extend that caution toward what he perceives as an overheated AI sector.
Burry’s Broader Market Warning
At the end of October 2025, Michael Burry took to X (formerly Twitter) to post one of his most cryptic yet striking warnings in years:
“Sometimes we see bubbles. Sometimes there is something to do about it. Sometimes the only winning move is not to play.”
The post marked his first public message in nearly two years and coincided with changes to his account’s profile, including references to “Cassandra Unchained”—a nod to the mythological figure who was cursed to deliver true prophecies no one would believe. The symbolism perfectly captures Burry’s reputation for spotting bubbles before others recognize them.
His return to social media and this major put position have reignited discussions among investors about whether another large-scale market correction could be near.
Timeline of Recent Events
| Date | Event | Significance |
|---|---|---|
| Q1 2025 | Scion sold most long positions and built large put options on Nvidia and Chinese tech firms. | Signaled a defensive, bearish market stance. |
| Late Oct 2025 | Burry posted a warning on X about financial “bubbles.” | Suggested concern about speculative valuations. |
| Early Nov 2025 | Reports revealed roughly 5 million Palantir put options, worth about $912 million. | Confirmed his continued bearish outlook, this time focused on AI stocks. |
Why Palantir May Be His Target
Several factors might explain why Michael Burry chose Palantir Technologies for such a sizable bearish bet:
- Valuation Risk: Palantir’s market capitalization and high earnings multiples imply expectations of continued, extraordinary growth. If those expectations falter, the stock could see sharp downside pressure.
- AI Hype Cycle: As one of the most recognized names in artificial intelligence analytics, Palantir may be overexposed to the broader AI euphoria that has fueled lofty valuations across tech stocks.
- Geopolitical and Contract Risks: Heavy reliance on government contracts and defense-related projects could make its revenue less predictable.
- Strategic Leverage: Using put options allows Burry to magnify potential gains from a decline while limiting his upfront risk compared to short-selling shares directly.
Investor Reactions and Market Context
For U.S. investors, Burry’s move is a signal to reevaluate portfolio exposure to high-growth technology and AI stocks. Palantir has been one of 2025’s standout performers, but its rise has also made it more vulnerable to sentiment shifts. If broader market trends turn negative—especially in technology—Palantir could be among the first to feel the impact.
Despite his reputation, Burry’s timing has not always been precise. His warnings often precede downturns by months or even years. However, investors rarely dismiss his actions, given his accurate forecast of the 2008 housing collapse.
Burry’s broader message seems less about any one company and more about market discipline. He appears to believe that markets, particularly tech and AI sectors, are pricing in perfection—an unrealistic assumption given current economic conditions. Rising interest rates, slowing corporate earnings growth, and global uncertainty add weight to his bearish stance.
What It Means for the AI Market
Palantir has positioned itself as a central player in the AI-driven transformation of government operations, defense, and enterprise data management. Its partnerships and expanding client base have fueled optimism that the company could lead the next decade of AI adoption.
Yet, Burry’s skepticism highlights concerns about:
- Sustainability of AI valuations
- Over-concentration of investor capital in tech stocks
- Potential macroeconomic shocks that could deflate enthusiasm in the sector
If his bet proves correct, it could trigger renewed caution across the AI landscape and prompt investors to seek safer or more diversified opportunities.
Scion Asset Management’s Current Strategy
Scion Asset Management, founded in 2000, continues to reflect Burry’s contrarian philosophy. The firm’s portfolio has shifted from high-growth equities toward positions that profit in downturns. Over the past year, Scion has steadily increased exposure to defensive sectors and market-hedging instruments while reducing direct equity holdings.
This mirrors Burry’s broader investment pattern: build substantial positions when assets are cheap and exit or short them when valuations appear excessive. His philosophy emphasizes fundamental value and skepticism toward investor exuberance—traits that once made him one of the few to correctly predict the 2008 mortgage crisis.
Lessons for Today’s Investors
Michael Burry’s latest move provides several takeaways:
- Caution in crowded trades: AI stocks, including Palantir, are currently the market’s most crowded trades.
- Understand risk exposure: Even fundamentally strong companies can experience sharp declines if sentiment shifts.
- Diversify: Over-exposure to one sector, particularly tech, can amplify risk during corrections.
- Learn from contrarian signals: While Burry’s positions don’t always play out immediately, they often highlight broader market vulnerabilities.
For long-term investors, this may be an opportunity to reassess holdings and consider balancing growth with stability.
The Bigger Picture
Burry’s warning and Palantir bet symbolize a wider concern about the current stage of the market cycle. Inflation remains sticky, interest rates stay elevated, and corporate profits face margin pressures. In such an environment, speculative valuations can become fragile.
Whether his prediction materializes or not, Michael Burry’s actions are a reminder of how quickly market sentiment can shift—and why disciplined, data-driven investing still matters more than ever.
In the end, Burry’s massive put position on Palantir reflects both a specific bet against one of the market’s hottest AI stocks and a broader message about caution amid euphoria. Investors would be wise to pay attention—even if they don’t necessarily follow his every move.
Stay tuned for updates, and share your thoughts below on whether you think Burry’s bearish stance will prove right this time.