Michael Burley is officially a meme.
The investor of “Big Short” fame set social media on fire after betting on Nvidia and criticizing the chipmaker and other AI companies over X, which may have contributed to Thursday’s stock market decline.
Why Michael Burley is enjoying the moment
Barry is best known for predicting and profiting from the bursting of the U.S. housing bubble in the mid-2000s. His huge contrarian bet was immortalized in the book The Big Short and the film adaptation starring Christian Bale as Barry.
Berry, known for her dire warnings about crashes and recessions, is referred to as “Cassandra” in X. This refers to a priestess in Greek mythology who was cursed to speak true prophecies, but who were never believed.
He returned to X in late October after more than two years of silence, and wasted no time issuing some warnings about the dangerous bubble in AI stocks.
His hedge fund, Scion Asset Management, disclosed days later that it had held bearish put options on Nvidia and Palantir in late September with a total notional amount of $1.1 billion.
Alex Karp, Palantir’s CEO, called the bet “fake insanity” in a TV interview and told Barry that the head of an AI company can’t “decipher a simple 13th floor.”
In a subsequent post, Berry said he had no shortfall and exited the Palantir put in October. He also removed Scion’s SEC registration and cut off its access to outside funding.
Most recently, it took aim at Nvidia, which posted a third-quarter profit beat on Wednesday. He questioned the longevity of the company’s chips, its “give-and-take deals” with other AI companies, and the dilution of its stock price.
Some market participants scrambled to ridicule his bearish stance on the AI boom as Nvidia shares soared more than 5% on the beat.
Other commenters mocked Berry’s rebelliousness and his willingness to stand up to big tech and the dominant market narrative.
Additionally, some people defend Barry, saying that while Barry is many things, stupidity is not one of them.
Nvidia stock opened higher on Thursday, but fell 3% by market close, and fell another 1% on Friday.
Nvidia is the world’s most valuable publicly traded company with a market capitalization of more than $4 trillion, so its sudden decline sent the entire stock market down on Thursday.
The S&P 500 gave up a 1.9% gain to close 1.6% lower, while the Nasdaq Composite Index rose 2.6% to fall 2.2%, the index’s biggest intraday change since April. Both rose less than 1% on Friday.
The reversal prompted some market players to rally behind Barry, celebrating his surprise return and suggesting that his skepticism may have been correct.
They also did not say whether Burley held any Nvidia puts or profited from Thursday’s decline, but they praised him for capitalizing on the turmoil.
AI stock has plunged 25% since the Nov. 3 earnings report and Mr. Berry’s put disclosure, and Mr. Berry also received praise for his bet on Palantir.
Mr. Berry is by no means the sole cause of the market slump. Investors also soured on Nvidia after analysts cited rising inventory and deferred revenue, raising concerns that the company’s growth may be brought forward and slow in coming quarters. Additionally, lagged economic data showed the U.S. unemployment rate rose to 4.4% in September, the highest level in nearly four years.
Burley has not yet posted about the online uproar surrounding his campaign against the AI giants. But his followers may hear more information soon, as X’s profile says, “‘Unchained’ may be coming sooner than November 25th.”
