Investor Michael Burry, known for his prediction during the 2008 financial crisis, has taken a bearish stance on several prominent AI stocks, including Nvidia (NASDAQ: NVDA), Palantir Technologies (NASDAQ: PLTR), and Tesla (NASDAQ: TSLA). Burry believes that the growth in AI infrastructure spending may not yield strong returns for hyperscalers, leading him to short Nvidia’s stock. Despite this, Nvidia is currently trading at a valuation of just above 15 times fiscal 2028 earnings estimates amid booming AI data center spending.
Palantir, while trading at a high forward price-to-sale multiple of 39.5 and a forward P/E of 86, has shown remarkable revenue growth and a 150% net dollar retention rate. With ongoing investments from existing clients, it is viewed as a stock worth holding. On the other hand, Tesla is facing a challenging environment, with a 172 forward P/E multiple and declining auto sales, particularly after CEO Elon Musk’s political involvement. Burry suggests that Tesla’s business prospects are under pressure due to the loss of regulatory credit profits and internal challenges with its robotaxi and robotics initiatives.
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