Investor Michael Burry holds short positions in Nvidia, Palantir and Tesla, expecting data-center operators to cut AI spending because they are not earning strong returns on it. Motley Fool analyst Geoffrey Seiler agrees with the Tesla call, holds Palantir, and calls Nvidia a buy at just above 15 times fiscal 2028 earnings estimates.
Michael Burry is short Nvidia, Palantir Technologies and Tesla. Motley Fool analyst Geoffrey Seiler backs that bearish case on only one of the three — he would buy Nvidia, hold Palantir and sell Tesla.
Burry's short rests on hyperscaler returns
In Burry's view, hyperscalers — owners of large data centers — are not getting strong returns on their investments, which he expects will eventually push them to cut back on AI infrastructure spending. Nvidia's graphics processing units have been the main chips powering the AI boom, so if that spending slows, so will its revenue growth.
However, Seiler sees no sign of a slowdown. Alphabet recently raised its 2026 capex forecast and said it will spend significantly more in 2027, while Taiwan Semiconductor Manufacturing is upping its own spending to build new fabs to keep up with chip demand — a decision he notes a conservative foundry does not make lightly.
That leaves the chipmaker at just above 15 times fiscal 2028 analyst earnings estimates, the fiscal year ending January 2028.
Palantir's multiples against 150% net dollar retention
Palantir trades at a forward price-to-sales multiple of nearly 39.5 and a forward P/E of 86, which is why Seiler says it is easy to see Burry's case against it. Even so, he holds the stock rather than betting against it, pointing to accelerating revenue growth and a 150% net dollar retention rate as existing clients invest more.
His argument for the company rests on its AIP platform, which gathers data across an organization and organizes it into an ontology linked to processes, concepts and physical objects — an application layer that helps reduce AI hallucinations and lets organizations swap large language models in and out.
Tesla carries a 172 forward P/E and lost regulatory credits
On the third name Seiler sides with Burry. Tesla's 172 forward P/E multiple sits on top of a struggling business. Losing lucrative, pure-gross-margin regulatory credits from a change in U.S. emissions policies is a huge blow to the company's profitability.
Auto sales also slumped last year after CEO Elon Musk alienated many potential buyers by getting involved in politics. The company is betting on robotaxis and robots for future growth, but the robotaxi business has struggled with safety issues and expansion while Waymo races across the country, and the robotics side must build new parts and a new supply chain.
Seiler adds that Musk's other company, Space Exploration Technologies, is now public, and that the two stocks are competing with each other for investors' attention, which has been hurting both.
Source: The Motley Fool
Trading involves risk.
Risk Disclaimer
