Look, AI is genuinely amazing. It’s helping doctors find cures, making cars smarter, and probably writing half the emails in your inbox (don’t @ me). But here’s the thing about revolutionary tech: sometimes the hype train goes so fast it derails spectacularly.
Remember the dot-com boom? Yeah, that. Except this time it’s artificial intelligence, and some very smart people (including Michael Burry, the guy who predicted the 2008 housing crash) are placing big bets that this party’s about to end badly.
So which AI stocks are most likely to crater if reality comes knocking? Let me introduce you to the three most vulnerable darlings:
Nvidia (NVDA): The Golden Child with a Target on Its Back
Nvidia is basically the cool kid everyone wants to sit with at lunch. Their GPUs power pretty much every AI data center on the planet, and their stock has gone up over 1,100% in three years. That’s not a typo.
But here’s where it gets spicy: Burry bought put options on 1 million Nvidia shares. That’s Wall Street speak for “I think this thing’s going down.” When the guy who called the housing crisis starts betting against you, people notice.
The problem? Everyone’s spending crazy money on AI infrastructure, but what happens when companies realize their fancy new AI chatbot isn’t actually making them more profitable? Nvidia could go from hero to zero faster than you can say “market correction.”
Palantir (PLTR): The Overachiever with Nosebleed Valuations
Palantir is like that friend who’s really smart but charges $200 for tutoring. Their AI platform is legitimately impressive, helping governments and big companies make sense of massive data dumps. The stock? Up almost 3,000% in three years. (Again, not a typo.)
But here’s the kicker: they’re trading at 200 times forward earnings. To put that in perspective, that’s like paying $200 for a sandwich because the chef might become famous someday. Maybe it’ll work out, but if the AI hype dies down even a little, this stock has a long way to fall.
CEO Alex Karp says you’re “crazy” if you bet against them. Bold words for a company priced like it’s already conquered the galaxy.
Tesla (TSLA): The EV Company That Thinks It’s an AI Company
Tesla’s interesting because it’s not obviously an AI stock, but Elon’s been pushing the “we’re actually a robotics and AI company” narrative hard. Self-driving cars, robot butlers, the whole sci-fi package.
The stock’s up 300% in three years (modest by AI standards, but still triple the S&P 500). Problem is, full self-driving keeps getting pushed back, and the competition in AI is getting fierce. Burry’s also betting against Tesla, calling it “ridiculously overvalued.”
The Bottom Line
Look, maybe this isn’t a bubble. Maybe AI really will change everything and these valuations will look reasonable in hindsight. But when stocks are priced for perfection and some very smart money is betting against them, it might be time to at least think about protecting your downside.
Just saying – bubbles are fun until they pop.