Nvidia and Palantir Stocks Fall Amid AI Bubble Fears
The tremors rippling through the artificial intelligence sector became starkly visible this morning as shares in two of its most prominent architects, Nvidia Corporation and Palantir Technologies, experienced notable declines. Nvidia, the undisputed kingpin of the AI hardware ecosystem with its powerful H100 and Blackwell GPUs, saw its stock dip more than 2.2%, while Palantir, whose Foundry and AIP platforms are deployed by governments and Fortune 500 companies to operationalize AI, tumbled over 6%. This synchronous downturn is more than a routine market correction; it is a direct response to a growing, gnawing anxiety among investors that the multi-trillion-dollar AI boom, which has propelled valuations to stratospheric heights, is exhibiting the classic, frothy characteristics of a speculative bubble, drawing unsettling parallels to the dotcom mania of the late 1990s.The catalyst for this latest bout of nerves was a regulatory filing from Scion Asset Management, the firm helmed by the legendary investor Michael Burry, who achieved immortality in financial lore for his prescient bet against the subprime mortgage market, a story immortalized in the film *The Big Short*. The filing revealed that Burry has taken a significant bearish position against both companies, acquiring put options that would profit from a decline in their stock prices.This move was telegraphed in a characteristically cryptic Halloween post on X, where Burry mused, 'Sometimes, we see bubbles. Sometimes, there is something to do about it.Sometimes, the only winning move is not to play,' accompanied by an image of Christian Bale’s portrayal of him. The intellectual weight of Burry’s skepticism cannot be dismissed as mere contrarianism; it forces a critical examination of the underlying fundamentals.While Nvidia’s data center revenue continues to shatter records, the core question is whether this demand is sustainable or if it represents a massive, front-loaded capital expenditure cycle that will eventually plateau. Similarly, Palantir’s astonishing 63% revenue growth in its recent Q3 report, which has driven its stock up over 150% year-to-date, is phenomenal, but it also raises the valuation bar to a level where any minor deceleration could trigger a severe repricing.The backlash was swift and pointed. Palantir’s CEO, Alex Karp, in a combative interview with CNBC, dismissed Burry’s thesis as 'batshit crazy,' arguing that betting against the companies 'making all the money' is a fundamentally flawed strategy.Karp’s defiance underscores the deep philosophical rift in the market: is this a transformative technological revolution justifying premium valuations, or are we witnessing a cycle of irrational exuberance? The data suggests the fear is widespread. A recent Bank of America Global Research survey found that 54% of fund managers now believe AI stocks are in a bubble.
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#Palantir
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