Michael Burry's Short on NVIDIA

Michael Burry, the contrarian investor famous for calling the 2008 housing crash, is now taking aim at Nvidia’s blockbuster AI-driven growth story. Following Nvidia’s latest earnings blowout, Burry argued that the company’s “true end demand” is far smaller than it appears. In his view, much of the reported demand for Nvidia’s chips comes from customers who are themselves funded by the broader AI ecosystem, creating a circular flow of money that exaggerates real economic value.

Burry also questioned Nvidia’s accounting practices, pointing to depreciation schedules and revenue recognition methods he believes could be masking underlying weakness. He noted that even though Nvidia spends heavily on stock buybacks, its total share count has actually risen, meaning dilution from employee compensation may be offsetting the intended benefits.

Nvidia’s management pushed back on these criticisms, emphasizing strong global demand for both new and older GPUs, and projecting trillions in long-term AI infrastructure investment. They defended the business as robust and dismissed talk of circular financing or inflated numbers.

Still, Burry’s warning lands with weight, and if his assessment is correct, the AI hardware boom, led by Nvidia, could be more fragile than it looks at first glance. For investors, especially those new to the market, the debate offers a valuable reminder that glamorous narratives and explosive growth stories should always be tested against the fundamentals of who is buying, why they are buying, and whether those purchases generate real economic returns.