u/johnhuey

Michael Burry has been super bearish on NVDA and his main reasonings were 1. Circular financing 2. High Depreciation cost of AI accelerators.

Literally those two points have been fully rebutted and turned out to not be true by yesterday’s news about Nvidia’s partnership with huge private credit firms and funding $500B of outside money into the AI infrastructure investments. Not to mention the fact revealed from Coreweave’s earnings call yesterday that they were able to rent out 6 yr old GPUs at a higher rate.

But regardless of these points, Burry still comes out yelling circular financing issue and maintains his long OTM put options position on NVDA. Does he enjoy losing money? Maybe I’m missing something? Please Help me understand this guy’s logics.

Source: https://x.com/michaeljburry/status/2087574948793450821?s=46&t=N46tXqexD1daG0tPoCPTDQ

Y’all like the monkeys that can never learn

I’m trying to figure out if I’m missing something with NVDA.

Not saying Nvidia is a bad company. Obviously it is a great company ran by a great CEO that nobody hates. Revenue is still insane, margins are still insane, and they basically own AI accelerators right now.

But the stock has been lagging a lot of other semi names lately. Micron, SK Hynix, AMD, Intel, Lumentum, etc. NVDA stock has returned a mere around 10% compared to the semiconductor Index's return of 100% return from the earnings back in November of 2025.

Feels like the market is buying the actual bottlenecks now, not just Nvidia is AI. The part I keep coming back to is HBM. Everyone says Nvidia sells the full platform, like Apple, not just a chip. Fair. But if HBM is the actual bottleneck, and memory suppliers are getting crazy margins, then doesn’t that become a real long term issue?

Micron is guiding gross margin around 80%. SK Hynix operating margin is also ridiculous now. These used to be cyclical commodity memory companies. Now HBM is basically the most critical AI infrastructure. So if Nvidia is the biggest buyer of HBM, why does it not have more negotiating power?

Maybe the answer is Nvidia needs guaranteed supply more than cheap supply. If you are selling expensive AI racks, you do not risk missing shipments just to squeeze SK Hynix or Micron. You pay up and lock supply. But that still means the HBM suppliers have real leverage.

I do not think Nvidia management is stupid. They clearly know this. They are locking long term supply, doing prepayments, qualifying multiple suppliers, and working closer with Micron, Samsung and SK Hynix. But is that enough? If HBM stays tight for years, Nvidia can still dominate AI compute but the incremental profit pool might shift more toward memory suppliers.

NVDA can still be a great company and still underperform if investors decide the better setup is in the scarce input. Also, this does not look like a tiny one quarter shortage. SK Hynix’s CEO said memory bottlenecks could last through 2030. TrendForce is saying 2027 HBM4 negotiations are happening with suppliers having more pricing power. Goldman reportedly expects memory undersupply into 2027/2028.

The one possible bear case for memory suppliers is China. If CXMT and YMTC keep scaling, maybe they eventually bring back commodity pricing. But I do not think that solves Nvidia’s high end HBM problem near term. Chinese memory might help normal DRAM/NAND first. Using Chinese HBM in top end Nvidia AI systems would raise performance, yield, qualification, customer trust, and political risk questions.

My question is simple. Is HBM just a temporary shortage? Or has HBM become a structural bottleneck where memory companies deserve much higher margins and multiples than they used to? Would like to hear the bull case against this.

• Nvidia Q1 FY27 earnings: Nvidia results
• Nvidia FY26 10-K: Nvidia annual filing
• Micron Q2 FY26 earnings: Micron results
• SK Hynix Q1 2026 results: SK Hynix results
• Reuters on SK Hynix/HBM: SK Hynix HBM market
• Reuters on shortage through 2030: SK Hynix capacity
• Reuters on shortage through late 2027: Memory supply crisis
• TrendForce on HBM pricing power: TrendForce HBM
• Goldman shortage summary: Memory squeeze
• Reuters on Chinese memory: PC makers and Chinese memory