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Michael Bury, the man from The Big Short, is betting against Nvidia, Micron and Palantir, saying the AI bubble will burst sooner than anyone thinks. We are long in exactly these three stocks and all three are showing a significant profit for us. So, who is right? Bury or us? Today I'll show you both sides with numbers, not with gut feeling.
So, let's dive right into the charts and analyses of these three stocks: Nvidia, Palantir, and Micron, the three heavyweights in the AI trade, which is why Bury is short there. Welcome to the WEAIQ channel. My name is Luke Michels, I have been in the markets for over ten years and I do the analysis at WEAIQ.
At WEAIQ, we personally set up each position with a clear entry and target zone, and today we're tackling the big topic on the stock market: AI bubble, yes or no? So, what exactly did Bury do? He had been holding short positions on Nvidia, Palantir and Micron for some time, and he has now closed them and bought put options instead.
Just to explain briefly, a put option is essentially a bet on falling prices, just like a short option, but with an expiry date. And if the stock price doesn't fall low enough by a certain date, then the entire investment is lost. This means the bet is significantly more speculative, and he is betting that the AI bubble will even burst by a certain date.
This is essentially a put bet. And this date is precisely what makes it so exciting. In August, Bury said the AI bubble would probably burst in 2028, but now he's writing that after research over the weekend, he wants to move his timeline forward from 2028. Accordingly, he's also set his contracts with Nvidia, which run until December 2026 and June 2027.
That means at least half a year, maybe even a full year, forward from 2028, as far as Nvidia is concerned. He's also bought contracts with Palantir until December 2026 and March 2027. Both have a base price of $100, and Micron's bids run until June 2027 with a base price of $500, which is really very, very low.
We will of course take a look at the current base price, that is, what is the current price for a Palantir, an Nvidia and a Micron, and to give you an idea of Micron in advance, it is currently at 1075 dollars. That means, with a base price of 500, yes, the price would have to fall by more than 50% within the next few months; that's what Barry is actually betting on here.
Yes, a brief self-promotion: our Nvidia setups – yes, we posted our setup here a few weeks ago, for example. That was our setup for Nvidia, which, as I said, have performed very, very well, showing a gain of over 22% since we started. These setups for Nvidia, Palantir, Micron and others can be found on the VIQ platform; the link is below in the video description.
There you will always find an entry zone for each of the setups , i.e. an area where we also find the stock or a certain asset, such as cryptocurrency, indices or precious metals, very attractive, and then a target zone where we take profits. We document every event and every result transparently and openly.
We also show you our losing trades, something many people simply don't do, and with the code Luke you get 10% off your first payment. The link is at the very top of the video description. Thank you all so much. The three stocks, namely Micron, published record figures last week. We can see the whole thing here in the chart.
We exceeded earnings by over 5 % and we also exceeded revenue by over 5%. The earnings were very, very spectacular. We watched the earnings call ourselves, of course. And Micron, in that respect, did n't really break out strongly to the upside , because investors' expectations were more or less just confirmed than anything else.
Our Micron analysis, which we published a few weeks ago, looked like this . We had an entry zone of $914 to $1000 and we have a target zone of $1440 to $1450. Since then, we are up over 17.6%. But that's not the important part, because the important part is that we at Micron have seen over 50% potential from our entry zone in this area.
Yes, and that is still active, meaning we definitely see gains of over 44% to 50% up to $1500 in Micron, and we will find further price levels or further entry and target zones in Micron in the next few weeks. We expect to see a movement here, like the one we just saw. This means that from a significant high, we will encounter a sell-off at one of our Fibonacci retracements, which allows us to predict exactly these entry points.
We are now approaching what is essentially the last all-time high. Yes, we will receive a correction here beforehand . This is what the chart currently looks like . That's what we can currently gather . We will set a new target, a new entry zone, as well as a new target zone, and then we expect Micron to reach a new all-time high here in the next few weeks and months and therefore also enter our target zone.
As just mentioned, let's briefly look at the fundamentals again. Micron released its quarterly figures on September 30th, so this is the fourth quarter , right? And we had a revenue of $4.854 billion, a gross profit of $47 billion, and thus a gross margin of 87%. That's really the absolute maximum, which is why I can understand the sell side, i.e., those who are betting against Micron, because there's not much room for margin anymore , but the stock is also fundamentally very, very cheaply valued.
If we look at the P/E ratio, we are currently at 14.79. The future P/E ratio, meaning the 12-month P/E ratio, is even significantly lower because Micron will definitely have a very strong next 12 months. However, Burry is betting against this, predicting that things wo n't continue so rosy from then on, i.e., in 2027 or after 2027, and that the capex figures of the big hyperscalers will initially decline, meaning that Micron will neither be able to increase nor maintain its profit figures .
And that is basically the thesis behind Burry . Micron's stock has risen by more than 500% in 12 months, and there's already a lot of expectation factored into the price. The growth has come over the last few months, and also due to this additional margin, which is why Micron has been able to increase its profit very, very significantly.
As I said, we remain bullish on Micron. You can find our other Micron analyses in the AI and Frontier Tech Portfolio as well as in the Tech 20 Portfolio for anyone who finds Micron interesting. Incidentally, Micron has a WIQ score of 82, making it one of the best and highest quality stocks on our platform.
But let's continue with Nvidia, since Burry is also shorting them. And if we look at Nvidia, or rather the analysis we shared about six weeks ago, here or eight weeks ago , in July, at the beginning of July, we shared this analysis on WIQ as well, with an entry zone of $191 to $194 and a target zone of $250 to $265.
They are up 22.5% since then and expect a potential of 38.7%. That means our target zone is between $250 and $265. And take a look at this chart as well . That was our analysis at the time. And if we look at the price today, we see that this analysis – and I'll just gloss over the current analysis a little here – has worked wonderfully.
This is the zone where we entered the market, between $ 194 and $191. So, this is the zone we entered at this price back then. And since then, the stock has really gone straight up. And we expect the stock to move into precisely this zone and then undergo a short-term correction, where we can then define another entry zone and publish it on WIQ with a further target zone, because we believe that Nvidia will continue to rise in the long term within this upward trend, as Nvidia is one of the strongest stocks there is .
For those who haven't seen Nvidia's VIQ Score yet , we even have an 84 in Nvidia's VIQ Score. If we look at the fundamental data on VIQ for Nvidia, we see that they are growing incredibly, incredibly strongly, in terms of revenue, net profit , operating cash flow and free cash flow; we have very, very strong growth at Nvidia.
If we look at the current P/ E ratios, we see that we are talking about a P/E ratio of 29, and that is incredibly cheap considering the growth we are currently seeing at Nvidia. We have a forward P/E ratio of almost 15 within the next 12 months, and therefore Nvidia is completely undervalued in my eyes and should be priced higher, where our analysis also sees Nvidia.
Palantir. Yes, we also want to take another look at Palantir . We also posted an analysis there at the beginning of July, and as you can see, that was our entry zone, and we see Palantir significantly higher, and since then Palantir has risen by over 60% . That was a fantastic introduction to Palantir.
With Palantir stock, we really timed the local bottom so precisely, and since then the stock has gone straight up, as if pulled by a line, really upwards, and we are simply waiting for Palantir to continue its upward move with a potential of 134%, significantly further into our target zone, which we have defined at VIQ .
Yes, what was our analysis here at Palantir? Palantir stock has of course performed incredibly well in recent years, reaching a significant high. That's where we can perfectly apply our analysis. We see that Palantir almost completely crashed through the 200 SMA, then started a sideways movement , as we can see, and finally caught up between our 0.5 and 0.618 retracement .
This retracement was really very well placed, as you can see, simultaneously a perfect support and resistance zone that we drew in this area, and that simply makes for a good entry point , that you find exactly these entry points here , which we then also set, and from there the stock naturally exploded.
Of course, we are also keeping an eye on Palantir's very strong earnings. In the last quarterly figures, we exceeded earnings by almost 19%. This means that not only were investor expectations met, they were significantly exceeded, and Palantir is also very, very strong in terms of revenue and continues to grow.
We remain bullish. We believe that Palantir will become one of the main drivers of AI, especially in the B2B sector. Palantir is simply AI infrastructure, and without Palantir, the companies of the future almost do n't want to operate at all. We also continue to assume that we will see short-term recoveries in the chart here, because we have simply had this very, very strong run here, after we had this downtrend, built up this uptrend , had this very, very strong run and are now getting recoveries.
We will also post further analyses on WEIQ so that we can find the right entry zones with the next target zone, and so that our customers can, if they still wish, enter the Palantir share at the best possible price and also know where we will take profits next. Palantir is also a stock that has simply performed very, very well, and Palantir also has very strong fundamentals.
Not only do the fundamentals fit, but the technical analysis also fits, which is why we have included Palantir in our AI and Frontier Tech portfolio . So, if you are interested in exactly these three stocks, you can find Nvidia in the AI and Frontier Tech Portfolio, the Global Leaders Portfolio and the Tech 20 Portfolio.
Palantir can also be found in the AI and Frontier Tech Portfolio, and Micron in both the AI and Frontier Tech Portfolio and the Tech 20 Portfolio. So, the question that remains, of course, is whether Burry is right with his thesis that AI is a very, very big bubble and will eventually burst? I take what Burry says relatively seriously, at least, even though he has often bet against the overall market and was wrong.
Nevertheless, it must be said that Burry also experienced the exact opposite scenario, which was documented in Big Short: Burry was right in his thesis when he bet against the overall market, and it worked out. There are real warning signs, for example. The yield on ten-year US Treasury bonds has climbed above 5.3% this week, which is a real warning signal—the highest level since 2002.
High interest rates are, relatively speaking, poison for overvalued stocks. If we look at Palantir, we see that it currently has a P/E ratio of 160. In nominal terms, Palantir is one of those stocks that is overvalued. We see the forward P/E ratio at 81, meaning investors expect Palantir to continue growing.
But these are precisely the stocks that Burry is referring to— very, very expensive. However, he is right, and timing is two different things, especially when... One, like Burry here, is betting against the market and not using the entry points to go long on these stocks. Therefore, our main scenario remains long with the target zones I just mentioned and the target zones we will define in the next few days and weeks, plus the entry zones for these three stocks and many, many other tech stocks on VIQ.
As I said, you can find all three setups on VIQ with the code Luke 10. You'll get a 10% discount. The link is above as the first link in the video description. Next week, by the way, we'll be talking about raw materials. Feel free to ask your questions about raw materials in the comments below, then I can look at some of the questions and answer them in the video .
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