"Big Short" Money Manager Michael Burry Just Bet Against Nvidia and Palantir. Is He Calling the Top of the Artificial Intelligence (AI) Boom?

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positions against Nvidia and Palantir.10 stocks we like better than Nvidia ›Michael Burry is one of the most intriguing characters in modern financial history. His claim to fame is that he was one of the first investors to sound the alarm that the subprime mortgage crisis was coming, prior to its implosion in 2007 and 2008 -- a financial meltdown that ultimately triggered the Great Recession.Seemingly overnight, Burry and his hedge fund, Scion Asset Management, gained celebrity among the "smart money" on Wall Street. With that in mind, it's not surprising that he still has the influence to move the capital markets.According to Scion's latest 13F filing, Burry has found his new big short(s): semiconductor giant Nvidia (NASDAQ: NVDA) and data mining specialist Palantir Technologies (NASDAQ: PLTR). During the third quarter, Burry purchased put options on both -- bets that each stock will decline in value.Is Burry sending an ominous warning that the artificial intelligence (AI) sector is due for a correction? Let's unpack how history appears to be on Burry's side, and assess whether this case may be different from similar ones in the past.For the last two years, Palantir has been one of the most impressive gainers in the S&P 500 (SNPINDEX: ^GSPC) and Nasdaq Composite (NASDAQINDEX: ^IXIC). In just the last 12 months, shares have climbed by a jaw-dropping 224%.While its momentum appears unstoppable, Burry does have a legitimate case when it comes to his suspicions surrounding the data analytics darling. From a valuation perspective, Palantir stock looks well overbought.PLTR PS Ratio data by YCharts.Its price-to-sales (P/S) multiple of 124 is far higher than any of its peers in the software landscape. What's more, Palantir's valuation continues to expand, suggesting that the stock is being fueled by unrelenting positive sentiment and hype.Given Burry's history with prior stock market crashes, my hunch is that he is drawing parallels between the AI boom and the dot-com era of the late 1990s. For reference, during that period, internet pioneers such as Microsoft, Amazon, and Cisco saw their P/S ratios peak in the ranges of 30 to 50 at the absolute highest.Considering Palantir's valuation is already in a different league than what investors witnessed during that period of internet euphoria, it's understandable that Burry may believe the stock is on a collision course with history.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P Futures6,776.75 +21.50 (+0.32%)Dow Futures47,224.00 -5.00 (-0.01%)Nasdaq Futures25,234.75 +140.75 (+0.56%)Russell 2000 Futures2,399.70 +3.70 (+0.15%)VIX19.83 -0.17 (-0.85%)Gold4,090.30 -3.90 (-0.10%)PortfolioSign in to access your portfolioSign inTop gainersCDTX Cidara Therapeutics, Inc. 217.71 +111.72 (+105.41%)SRRK Scholar Rock Holding Corporation 37.41 +7.34 (+24.41%)AVDL Avadel Pharmaceuticals plc 23.56 +4.32 (+22.45%)LGN Legence Corp. 40.27 +6.95 (+20.86%)CSIQ Canadian Solar Inc. 33.58 +4.96 (+17.33%)Top losersDGNX Diginex Limited 10.53 -2.97 (-22.00%)STUB StubHub Holdings, Inc. 14.87 -3.95 (-20.99%)HTFL Heartflow, Inc. 27.98 -2.96 (-9.57%)EOSE Eos Energy Enterprises, Inc. 13.80 -1.40 (-9.24%)CLSK CleanSpark, Inc. 10.96 -1.02 (-8.51%)Most activeNVDA NVIDIA Corporation 190.17 +3.31 (+1.77%)ONDS Ondas Holdings Inc. 7.18 +0.62 (+9.45%)OPEN Opendoor Technologies Inc. 8.12 -0.44 (-5.14%)TSLA Tesla, Inc. 404.35 +2.36 (+0.59%)PFE Pfizer Inc. 25.06 -0.73 (-2.83%)Earnings eventsMy earnings eventsEarnings eventsTrending tickersBTC-USD Bitcoin USD 95,044.52 -580.70 (-0.61%)GOOG Alphabet Inc. 276.98 -2.14 (-0.77%)GOOGL Alphabet Inc. 276.41 -2.16 (-0.78%)ETH-USD Ethereum USD 3,148.14 -25.47 (-0.80%)GNS Genius Group Limited 0.8629 +0.0239 (+2.85%)Top economic events