According to Fast Company, Nvidia shares are down more than 2.2% and Palantir shares have dropped over 6% this morning as investors grow increasingly concerned that the AI boom is starting to resemble the dotcom bubble of the late 1990s and early 2000s. The selloff comes as more investors, including Michael Burry—the investor who famously predicted the 2008 housing crash—are betting against AI-related stocks. Burry made his fortune by shorting housing stocks before the financial crisis, and now he’s applying similar skepticism to the artificial intelligence sector. The current market movement suggests growing anxiety about whether AI companies can live up to their massive valuations.
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<h2 id="bubble-trouble”>Is This Dotcom 2.0?
Here’s the thing about market bubbles—they always feel different until they don’t. The current AI frenzy has been building for over a year now, with Nvidia’s stock soaring more than 200% in the past year alone. But when you see investors like Michael Burry taking the opposite side of the trade, it definitely makes you pause. Remember, this is the guy who saw the housing collapse coming when everyone else thought prices would keep rising forever.
So what’s different this time? Well, AI does have real applications and massive potential. Companies are actually spending billions on AI infrastructure, unlike the vaporware companies of the dotcom era. But the question isn’t whether AI is valuable—it’s whether current stock prices reflect realistic growth expectations or pure speculation.
When the Contrarian Speaks
Michael Burry’s track record gives his current bearish stance extra weight. He’s not just some random analyst—he successfully bet against the entire housing market when everyone thought he was crazy. Now he’s looking at AI stocks and seeing similar patterns of irrational exuberance.
But here’s where it gets interesting. Burry has been wrong before on timing. He started warning about a “giant bubble” in tech stocks back in 2021, and we all know how that played out—the AI boom only accelerated. So is he early again? Or is he actually right this time?
Where Do We Go From Here?
The immediate concern is whether this is just a temporary pullback or the start of something bigger. Today’s drops aren’t catastrophic—2.2% for Nvidia and 6% for Palantir are significant but not panic-inducing. The real story is the sentiment shift. When the smart money starts betting against the trend, retail investors should probably pay attention.
Basically, we’re at that point in every market cycle where everyone starts asking “is this different?” Sometimes it is—new technologies do create lasting value. But sometimes, the fundamentals eventually matter more than the hype. The next few earnings reports from these AI companies will be crucial. They’ll need to show that all this investment is translating into real, sustainable profits—not just promises.
