Burry: Nvidia Appears Undervalued, Keeps Significant Short

Nvidia reported market-beating fiscal second-quarter results and issued strong guidance for the current quarter, sending shares sharply higher.

Investor Michael Burry, founder of Scion Asset Management, wrote on Substack that conventional valuation screens make Nvidia appear “wildly undervalued” given its GPU market share, accelerating revenue and a price-to-earnings ratio near 24.

Burry noted he still holds a significant short position while the stock trades near its year-to-date high.

His primary concern centers on demand from large cloud providers. He wrote that current earnings rely on an “unprecedented, front-loaded AI buildout” by hyperscalers and warned the pace may be “difficult to maintain” once initial datacenter deployments reach saturation.

He flagged the risk that competitors could erode Nvidia’s pricing and margins over time and argued standard valuation measures can mask the temporary lift from cyclical capex and obscure longer-term competitive pressures.

Technical indicators offer mixed signals. Nvidia’s relative strength index sits in the mid-60s, indicating the stock is approaching overbought territory. Options market activity remains skewed toward bullish sentiment.

Wall Street’s consensus rating on Nvidia is Strong Buy. The lowest published price target is about $172, roughly 30% below recent levels. Analysts differ on the sustainability of current earnings.

Burry is known for his 2008 housing-market call and has used his Substack posts to outline investment positions. In his latest post he laid out why he views some of Nvidia’s upside as potentially cyclical rather than structural.

Nvidia’s market share and rising sales have driven the recent rally, while questions about the durability of hyperscaler spending and competitive pressure remain part of the debate among investors and analysts.