Michael Burry, the investor famous for betting against the US housing market before the 2008 financial crisis, is now sounding alarms about Nvidia. His argument: the chipmaker’s extraordinary revenue growth is being powered by a small group of buyers whose spending habits may not last.
In a Substack post published on May 24, titled “The Heretic’s Guide to AI’s Stars Part III: Tracepalooza and the Bezzle,” Burry laid out what he sees as the structural fragility underneath Nvidia’s headline numbers. The core thesis is that demand from hyperscalers like Microsoft, Google, Amazon, and Meta is temporarily distorted, not permanently elevated.
The numbers look great, until you squint
Nvidia’s most recent quarterly revenue came in at $81.6 billion, representing 85% year-over-year growth.
Hyperscalers account for approximately 50% of Nvidia’s data-center revenue, according to Burry’s analysis. That level of concentration means a relatively small shift in purchasing behavior from just one or two customers could ripple through the entire business.
