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It seems quite risky to place a bet on either Palantir (NASDAQ:PLTR) or Nvidia (NASDAQ:NVDA) moving forward, given valuations and the high stakes, as investors fear and dread an AI bubble bust. Undoubtedly, Michael Burry has bearish bets against both AI darlings. But he’s got more exposure to Palantir puts than Nvidia, likely because of the even hotter valuation and the potential for coming quarters to fall well short of expectations.
As for Nvidia, it’s the largest company on the planet, with ample catalysts in the new year. But until GPU sales fall off a cliff and buyers pass on Rubin, shares of Nvidia certainly do seem harder to short, at least in my opinion, especially when you consider that 24.5 times forward price-to-earnings (P/E) is nothing close to resembling a bubble. Though if the year ahead’s earnings fall well short of expectations, perhaps the seemingly cheap valuation metrics are more of a mirage than an indicator of real value.
For now, Rubin is projected to be a hit and a major catalyst that could help Nvidia stock continue defying the odds. The hyperscalers are ready to spend, and there’s probably going to be an arms race for the latest and greatest GPUs, especially when you consider the memory shortage and how it could incentivize backing up the truck whenever there’s stock, perhaps in a similar manner as the toilet paper boom during the early days of the COVID pandemic.
Billionaire Chris Rokos buys Nvidia, sells Palantir
Given Rubin Ultra, and Feynman after that, and how much is on the line to stay ahead in the AI race as Chinese rivals pick up the pace, perhaps dropping Palantir for Nvidia could be the smarter move. Undoubtedly, Michael Burry is far more bearish on one name than the other. And with famed billionaire investor Chris Rokos selling Palantir while buying into Nvidia, it seems like a smart move, not just based on relative valuation, but given the likelihood that AI demand will be in a spot to fuel a surge, the likes of which investors may not have seen since 2024.
So, should investors follow Roko’s lead by dumping Palantir for the likes of Nvidia? That’s the big question going into the new year. Personally, the valuation seems too hefty to warrant doubling down on Palantir after its latest slump, especially when you consider the magnitude of Michael Burry’s bearish bets.
Going into the new year, it feels like Burry is as confident as ever in his big bearish bets. He doesn’t think he’s too early, and he’s been keeping investors informed with his new Substack newsletter. Though I personally wouldn’t want to be a new buyer in Palantir or Nvidia, especially as the technical picture gets a bit scarier, I do think Palantir stock could stand to lose more ground if 2026 is a year when the AI bubble lets out a bit more of its air.
Nvidia certainly looks far cheaper than Palantir, even as Michael Burry stays bearish on both
Additionally, there seems to be far more visibility into Nvidia than Palantir, especially when it comes to government contracts. In short, Palantir is a tougher business to understand, in my view, with a post-quarter reaction that’s even harder to gauge. As firms continue to move ahead at full speed with AI infrastructure, the case for Nvidia stock being a reasonable value right here, I think, increases.
As for Palantir, it’s tough to tell how things will pan out as AI software companies look to get in on the action. Perhaps the ultimate pick and shovels play is still the way to go. Ultimately, I think Roko’s latest move has the potential to prove well-timed as both companies head into a new year with high expectations set ahead of them.