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Key Points
Hedge fund manager Michael Burry, known for predicting the subprime mortgage crisis, has recently made headlines by acquiring put options on Nvidia (NASDAQ: NVDA) and Palantir Technologies (NASDAQ: PLTR) during Q3 2023, expressing concern about their high valuations amidst a potential AI bubble. He believes Nvidia’s accounting practices may be misrepresenting its true financial health.
Burry highlighted that Palantir’s price-to-sales ratio is 113 and its price-to-earnings multiple is 403, indicating unsustainably high valuations. He also pointed out discrepancies in depreciation timelines for Nvidia’s hardware, suggesting that inflated valuations could lead to scaled-back investments if earnings decline.
Additionally, Burry criticized Tesla (NASDAQ: TSLA), labeling it “ridiculously overvalued,” with a price-to-sales ratio of 16 despite declining profitability. His recent actions reflect a shift towards a more flexible commentary approach after deregistering Scion Asset Management.
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