Nvidia (NVDA), Palantir Technologies (PLTR) and Caterpillar (CAT) are on track to defy Michael Burry’s bearish bets this week, even as the “Big Short” investor acknowledged the companies’ remarkable AI performance, while warning that today’s surging demand could ultimately give way to tomorrow’s “ghost towns.”
Over the past week, has surged 29%, has climbed 15% and has gained 11%. PLTR and NVDA outpaced the iShares Semiconductor ETF (SOXX), which advanced 14%, while all three stocks easily beat the broader market: the Invesco QQQ Trust (QQQ) rose 8.4%, the SPDR S&P 500 ETF Trust (SPY) gained 5.5% and the SPDR Dow Jones Industrial Average ETF Trust (DIA) added 5.3%.
Michael Burry Says AI Gold Rush Could Become ‘Ghost Towns’
“There is no doubt that right now there are shortages, no doubt that $CAT is really doing unbelievably well, $PLTR is really filling acute CYA needs, $NVDA’s margins & prices really cause nosebleeds,” Burry said on X. “There’s really gold in them thar hills,” he added. “Just pointing out future ghost towns.”
Since late 2025, Burry has compared the AI boom with the late-1990s telecom buildout, arguing in his May “Heretic’s Guide to AI’s Stars” series that genuine demand was encouraging excessive investment that could eventually leave capacity underused.
CAT And PLTR Show Why The Shorts Hurt
Caterpillar’s second-quarter (Q2) sales rose 24% to a record $20.5 billion, while adjusted earnings climbed 73% to $8.17 per share. Its backlog nearly doubled from a year earlier to $72 billion. Power-generation sales surged 72% as data centers drove demand for large generators and turbines. Some customers are ordering through 2030, prompting Caterpillar to restart a 10-megawatt gas-engine platform and expand turbine capacity to 2.5 times 2024 levels.
Meanwhile, Palantir’s revenue jumped 93% to $1.94 billion, with U.S. commercial sales up 149% and U.S. government revenue rising 90%. Adjusted free cash flow reached $1.22 billion at a 63% margin. The company closed 157 deals worth at least $1 million, including 73 valued at $10 million or more, and raised its full-year 2026 revenue midpoint to $8.15 billion.
Palantir maintains that its platform delivers measurable results. Chief technology officer Shyam Sankar said on the company’s recent earnings call that the market has created “far more intelligence than it has converted into value.” Burry has nevertheless called Palantir “wildly overvalued” and placed its fundamental value well below $50 in April.
Nvidia’s AI Deals Put Circular Demand In Focus
Nvidia remains the AI boom’s essential supplier, with gross margins near 75% and a market cap around $5 trillion. But deals reported last week only added fresh weight to Burry’s concerns about suppliers financing the customers that buy their products.
Nvidia is reportedly considering guaranteeing up to $250 billion for OpenAI’s lease of a proposed $500 billion Ohio data center while separately discussing financing $350 billion in OpenAI chip purchases. It also pursued more than $750 billion in AI deals last week, including over $500 billion in two-way business with SK Group, a reported $5 billion Safe Superintelligence investment and $1 billion for Naver’s data-center expansion.
How Burry Built His Shorts
Burry’s AI-bubble trade emerged in November 2025, when Scion Asset Management disclosed Nvidia puts with $187 million of notional exposure and Palantir puts worth $912 million. In April, Burry confirmed that he still held Palantir puts expiring in December 2026 and June 2027. In May, he targeted Nvidia’s customer concentration, circular financing and potentially temporary training-driven demand.
In June, Burry disclosed his first Caterpillar short at $1,060.98 after an 86% year-to-date rally pushed its price-to-sales ratio to new highs. He also disclosed new or expanded shorts in Nvidia, Applied Materials, Tesla and the semiconductor sector. Additionally, Burry added a Micron short early last month and also increased his Nvidia short at $210.28.
In a recent update from this week, he said he had rolled part of his Nvidia puts into June 2027 and retained the equity short. He exited Palantir’s shorter-dated puts because volatility remained high but kept its stock short. His Caterpillar short also remained open. Burry also warned of a possible “1987-type fall,” though he said he would cut positions moving “decisively against” him.
How Do Retail Traders Feel About NVDA, PLTR, CAT?
On Stocktwits, retail sentiment was ‘extremely bullish’ for PLTR and CAT and ‘bullish’ for NVDA, with message volume ‘extremely high’ for PLTR and ‘high’ for NVDA and CAT.
Over the past year, PLTR has fallen 9%, while NVDA has gained 23% and CAT has surged 102%.