Burry shorts NVDA due to concerns over unsustainable AI spending and future competition, despite acknowledging potential short-term upside.

But on the other side, he's betting big against the AI boom, shorting Chip and AI names like Micron, Oracle, Palunteer, and Nvidia, with his total bets against stocks now topping 21% of his portfolio.

And finally, the strangest bet of them all, Nvidia. Because Bur is somehow betting both ways at the exact same time. He is short Nvidia while also owning Nvidia call options. How on earth does that make sense?

Well, right before Nvidia's earnings, he bought some call options. Basically, a small bet the stock will go up, but he flat out called them a hedge like insurance. Then, less than a day later, he sold half of them, saying they' done their job.

He stays bearish for the long run, but admitted that there was little standing in the way of further stock appreciation in the short term.

So, the bullcase. Nvidia is a money printing monster with a near monopoly on AI chips. Bur himself admitted it can even look wildly undervalued. Which, by the way, is kind of interesting in our channel because I get a lot of people saying, "Wait a second, Paul.

Two years ago you said Nvidia is massive overpriced. Now you're saying it could very well be undervalued." And the logic behind that is if they're able to still consistently grow like they have been, it is undervalued.

But that's the exact question to ask. same thing Bur is saying.

But the bare case is his real worry. He said Nvidia currently commands monopoly rents with the emphasis on currently. His fear isn't that AI is fake. It's that all the AI spending on AI might not pay off.

He points the mind-boggling piles of money being poured into data centers and chips that could become outdated shockingly fast. that competition will eventually bite and that those magical profits may not last nearly as long as today's price assumes. That's always been our biggest concern.

So, let's run the numbers and see for ourselves because it's very, very interesting to be talking about one of the most overhyped companies potentially being undervalued. So, guys, the $5.4 trillion juggernaut that is Nvidia, here's the best part.

Enterprise values 5.47. That's $30 billion in debt and they generated 127 in free cash flow last year. 52 a.5 billion in the last five years.

Returns on capital. These are Apple type of returns on capital. 73% last year, 55% a year for the last 5 years.

Look at these profit margins. 53 a.5% for the last 10. 56% for the last five. 64 last year. Gross profit of 75%. Look at their gross profit growth, guys. Look at their quarterly growth.

This is the 50% mark. They were they were growing as time went on. A dip in 2022 and look at that skyrocket. That's when the whole AI chip craze happened. It absolutely skyrocketed their profit margins.

And what's interesting is they pay a small little dividend.12% that eats up 7 billion of their free cash flow of 127. Very impressive stuff. Yeah, they've made small um acquisitions, 16 billion over the last five years.

But look at this revenue growth rate. 110% a year for the last three, 69 for the last five, 49 for the last 10. You would have thought this would be the other way around with it slowing down.

It's only gotten faster. The question is, will that go?

Guys, our community members actually have Nvidia as a buy, which is kind of surprising to me. Here's our eight pillars. Everything's a check except for these valuation metrics.

But you got to remember their free cash flow and net income are up a lot over the last five years. So, you can't exactly care much about these. You got to look at the recent numbers.

If, especially if you think they're in a permanent plateau of profit and cash flow, if you think it's only going to get better from here, I would ignore these.

Next, we go to analysts. Well, analysts have 470 growing to $20 per share in the next five years. Jesus Christ, guys. It's insane. and revenue going from 215 billion to a trillion dollars in the next five years. I mean, it's absolutely absolutely insane.

So guys, here we are in the stock analyzer tool. Now, the hard part about this company is doing a 10-year analysis. So guys, what I'm going to do is I'm going to do a five-year analysis and I'm gonna assume this boom keeps on going 20, 30, 40% revenue growth in the next five years.

Guys, I'm not going to lie to you. I have a hard time even doing this for five years. Could it happen? Yes. But if there are any breaks that get hit in the next five years, this is going to plummet.

Profit margin is going to plummet. I put in 35 45 and 55% even though they're crushing those numbers. PE 18, 23, and 28. And again, my 9.5% no margin of safety return.

It's the same stock analyzer tool on your screen right now. It's the same eight pillars. It's the same key metrics. But in this situation, you put your own assumptions in on Lululemon, Adobe, Nvidia. You get your own number today.

So guys, click the first link in the description below. Go do it before I show you what Nvidia came back at. I'd rather you have your own answer first. So guys, the stock's currently at 223.

I hit the analyze button. Remember, it's for 5 years from now. This is why this might be a value play. I have a low price of 145, a high price of 709, middle price of 340. So, I can understand this logic behind it being a value play if you think that AI is just going to keep on going for a long time.

So, after we recorded this video, Michael Bur himself came out and said that he pulled in risk in September. He trimmed every one of his positions and he dropped his December 2026 puts on Nvidia and Palanteer without rolling them into new ones.