Michael Burry, the investor who became a household name for betting against the US housing market before the 2008 financial crisis, is now turning his skeptical eye toward the biggest winner of the AI boom. In a Substack post titled “The Heretic’s Guide to AI’s Stars Part III: Tracepalooza and the Bezzle,” Burry laid out a detailed case for why Nvidia’s current revenue trajectory may be built on shakier ground than most investors realize.
The concentration problem
Burry’s concern centers on Nvidia’s heavy dependence on hyperscale cloud providers. Microsoft, Google, Amazon, and Meta collectively account for roughly 50% of Nvidia’s data-center revenue.
Nvidia’s latest quarterly revenue hit $81.6 billion, an 85% year-over-year increase. Burry drew a comparison to Cisco Systems during the dot-com era. Cisco was the picks-and-shovels play of the internet buildout, supplying the networking equipment that made the web possible. Its stock peaked in March 2000 and proceeded to lose nearly 90% of its value over the following two years.
The bullwhip and the bezzle
