"And while he's raised some intriguing bear points (such as the GPU depreciation schedule and other accounting practices that might be a bit on the aggressive side) about the big tech innovators, which seem to be going all-in on the AI boom, I'm not so sure such finer details matter as much in the grander scheme of things, provided the AI revolution lives up to the high ROI hopes."
"Undoubtedly, we're going to need to see greater monetization of the technology in the new year. Otherwise, the path may very well be lower for the AI names, especially the ones that have enjoyed triple-digit percentage gains in just over a year. Personally, I don't think an AI bubble bust is the only way the boom has to end. Additionally, I think Burry could make a fortune from his bearish bets on Nvidia and Palantir ( NASDAQ:PLTR), without the entire trade going up in smoke."
"How? Frequent rolling corrections concentrated in the AI stocks might be another way to "correct" moments of excess enthusiasm and pockets of severe overvaluation. Undoubtedly, perhaps the corrections could prove more isolated, punishing names like Palantir, as big-tech stars with more modest valuation multiples proceed higher. Undoubtedly, it seems like Google parent Alphabet ( NASDAQ:GOOG) remains an AI trade that may very well be spared from future rolling corrections as they happen."
Bearish bets target major AI winners like Nvidia and Palantir, citing concerns such as GPU depreciation schedules and aggressive accounting practices. Greater monetization of AI capabilities will be necessary to justify current valuations, otherwise highly appreciated AI names risk declines after triple-digit gains. The AI boom can correct through frequent, rolling, and sometimes isolated pullbacks rather than a single crash. Those corrections could disproportionately punish speculative names like Palantir while larger tech firms with lower multiples, such as Alphabet, may remain relatively insulated. Tactical rotation into cheaper, fundamentally stronger AI exposures can preserve returns.
Read at 24/7 Wall St.
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