'Big Short' investor Michael Burry is sounding the alarm on Nvidia Corp.
(NASDAQ:NVDA), claiming the AI giant's strategic financial "overreaching" has escalated its "circular spending" to "biblical proportions," which he argues is driving a massive spike in the company's credit default swap risks.
Default Swaps ‘Going Parabolic’ Taking to X, Burry pointed to a sharp rise in the cost of insuring Nvidia's debt as a glaring warning sign.
"There is a reason $NVDA’s 5 year credit default swaps are going parabolic," Burry posted, sharing a terminal chart showing the swaps up nearly 90% year-to-date.
He attributed this sudden surge directly to "All this overreaching by #nvda to push the circular spending to biblical proportions." This criticism coincides with reports that Nvidia signed data center leases worth up to $50 billion in Texas to support its "neocloud" partners—a financial maneuver that skeptics argue keeps high costs off Nvidia's balance sheet while artificially driving demand for its own GPUs.
