AI Stocks Waver as ‘Big Short’ Investor Bets against Palantir, Nvidia

The Washington Post

12:42 JST, November 5, 2025

A months-long rally in Big Tech stocks faltered Tuesday as artificial intelligence data company Palantir was targeted by a prominent short-seller, sparking invective from CEO Alex Karp and a sell-off on Wall Street.

A Securities and Exchange Commission filing covering a period up to Sept. 30 and made public Monday showed that Michael Burry’s firm held puts on Nvidia and Palantir, a way to bet that the stock price will fall in the future. Burry’s investment position may have changed, and the form doesn’t preclude his having other investments in the AI companies’ stocks.

By the end of the trading day, Palantir had shed nearly 8 percent and Nvidia nearly 4 percent.

In a sign of Big Tech’s influence in the broader stock market, the S&P 500 index closed down 1.2 percent. Meanwhile, the tech-centric Nasdaq composite index lost 2 percent and the Dow Jones Industrial Average dropped 0.5 percent. Oracle and AMD, also AI stocks, both fell 3.7 percent.

The sell-off was enough to prompt a spirited response from Karp, the Palantir CEO, who blasted Burry and other short-sellers for “trying to call the AI revolution into question” in a Tuesday CNBC interview.

“It just is super triggering because these people … they can pick on any company in the world; they have to pick on the one that actually helps people, that actually has made money for the average person, that is actually helping our warfighters,” Karp said, swinging his arms up and down with closed fists and calling Burry “bats— crazy” for betting against AI.

Burr, who traded the medical profession for finance, grew to prominence as a hedge fund manager by betting against the housing market ahead of its 2008 collapse, a feat that was chronicled in “The Big Short,” a book by Michael Lewis that was adapted for the screen.

The book presents Burry, the founder of Scion Capital, among a group of investors who foresaw problems with mortgage-backed securities before leading Wall Street institutions did, enriching themselves and their investors through complex investments that allowed them to profit from the system’s collapse. Burry has since become a cult figure of sorts in the online investor community, with Reddit conversations devoted to analyzing his trades.

Beyond his hedge fund’s Monday disclosure, Burry has been vague about his position on artificial intelligence.

“Sometimes, we see bubbles. Sometimes, there is something to do about it. Sometimes, the only winning move is not to play,” Burry said in an Oct. 30 post on X.

In a Tuesday post, he wrote: “Fake news! I am not 5’6” (not that there is anything wrong with that). And journalists reporting on 13Fs, none more fake.” (A 13F is a quarterly form that hedge funds file with the SEC disclosing certain positions.)

Burry could not be reached for comment Tuesday. But his disclosure comes on the heels of a strong quarter for Palantir, which has built a niche helping a wide array of companies and government agencies use AI.

In financial results covering the three-month period ending Sept. 30, the company posted a record $1.18 billion in revenue, marking a 63 percent year-over-year increase, alongside a profit margin of 33 percent.

In a Monday letter to shareholders, Karp attributed the company’s growth to “voracious” adopters of artificial intelligence in the United States, whose use of AI language models is “reordering human life” through “a ruthless pragmatism.”

“This ascent has confounded most financial analysts and the chattering class, whose frames of reference did not quite anticipate a company of this size and scale growing at such a ferocious and unrelenting rate,” Karp wrote. “Some of our detractors have been left in a kind of deranged and self-destructive befuddlement.”

Both Palantir and Nvidia have been beneficiaries of a historic investment boom around artificial intelligence, with their stock prices surging about 150 percent and 45 percent, respectively, since the start of the year.

Some leading investors have warned that the market could be primed for a correction at a time when it is heavily dependent on a few names in Big Tech.

Two leading investment bank CEOs – Ted Pick of Morgan Stanley and David Solomon of Goldman Sachs – said at the Global Financial Leaders’ Investment Summit in Hong Kong overnight that a “drawdown” is likely in the coming years.

“We should also welcome the possibility that there will be … 10 to 15 percent drawdowns that are not driven by some sort of macro cliff effect,” Pick said.

Solomon said he generally advises his clients to stay invested rather than try to time the market, adding that such pullbacks are part of a normal investment cycle. Others believe the rally still has a ways to go.

Dan Ives, a technology analyst with WedBush Securities who has been bullish on tech stocks, likened Burry’s position to “yelling fire in a crowded theater,” arguing that both Palantir and Nvidia have shown strong financial results. WedBush believes the AI rally could continue another two or three years, Ives said.

“Many of these naysayers scare investors with their doomsday predictions and they have been wrong during this entire bull market,” Ives said in an email.

Josh Chastant, a portfolio manager at GuideStone Funds, said Palantir’s earnings report gave investors a reason to reassess the market’s willingness to keep driving up valuations for tech stocks.

“It looked really good but just not good enough to justify what may seem like the poster child for extreme valuations in the tech space right now,” Chastant said of Palantir’s financial report. “I think this is a moment for people to reset take a deep breath and think about where they are.”