Investment Strategy - Scion Asset Management, led by Michael Burry, made significant bets against AI companies Palantir Technologies and Nvidia in Q3 2025, purchasing 5 million put options on Palantir valued at $912 million and 1 million put options on Nvidia valued at $186.5 million [4][3] - Burry has been vocal on social media about his concerns regarding the tech sector, particularly highlighting the growth in U.S. tech capital expenditures nearing levels seen during the tech bubble [5] Company Analysis: Palantir and Nvidia - Concerns have been raised about the financial practices of major AI firms, with Burry suggesting that companies like Meta Platforms and Oracle are overstating earnings by extending the useful life of assets, potentially inflating earnings by 21% and 27% respectively by 2028 [6] - Despite the potential of Nvidia and Palantir, Burry emphasizes the importance of valuation, noting that Palantir trades at 268 times forward earnings, indicating a need for caution among investors [7] Company Analysis: Lululemon - Scion purchased 100,000 shares of Lululemon, valued at approximately $18 million at the end of Q3 2025, as the stock has declined 54% this year due to consumer inflation and competition [9][10] - Lululemon's management indicated that the removal of the de minimis exemption and increased tariffs will negatively impact gross margins by $240 million in fiscal 2025 and $320 million in fiscal 2026 [13] - The company has seen a 7% year-over-year increase in net revenue for the first half of 2025, but diluted earnings per share remained flat at $5.70 [13] Market Context - Lululemon's stock trades at about 13 times forward earnings, suggesting potential value, but there are doubts about the company's ability to recover fully in the near term [14] - The apparel market is facing challenges, with consumers less willing to pay premium prices for fitness apparel, impacting Lululemon's sales [10]

Group 1: Palantir Technologies - Palantir Technologies develops analytics software for public and private sectors, with core platforms Gotham and Foundry integrating data and machine learning models into a decision-making framework [3] - The company reported strong third-quarter results, with revenue increasing 63% to $1.1 billion and non-GAAP net income rising 110% to $0.21 per diluted share, leading to a raised full-year revenue forecast of 53% for 2025 [4] - Despite strong performance, Palantir's price-to-sales (PS) ratio is 112, significantly higher than the next closest S&P 500 company, AppLovin, at 36 times sales, indicating a disconnection from valuation reality [5][6] Group 2: Hedge Fund Activity - Israel Englander at Millennium Management increased his stake in Palantir by purchasing 3.6 million shares, making it his eighth largest holding, while completely exiting his position in Rigetti by selling 298,000 shares [5] - Cliff Asness at AQR Capital Management bought 439,700 shares of Palantir, increasing his stake by 20%, while reducing his position in Rigetti by selling 4,100 shares [5] Group 3: Rigetti Computing - Rigetti Computing utilizes superconducting qubit processors for calculations and has a vertically integrated approach, controlling much of its hardware supply chain [9][10] - The company trades at an extremely high valuation of 1,087 times sales, which is nearly 10 times more expensive than Palantir, suggesting that the market may have overvalued the stock [10]

Core Viewpoint - Palantir Technologies reported strong third-quarter results, achieving record highs in revenue and profits while securing multimillion-dollar contracts rapidly [1][5]. Financial Performance - Revenue increased by 63% year-over-year to $1.18 billion, with net income rising 40% to $475.6 million, and adjusted earnings per share at $0.21 [5]. - U.S. commercial revenue surged 121% to $397 million, while U.S. government revenue grew by 52% to $486 million [5]. - The company closed 204 deals valued over $1 million, including 91 deals worth more than $5 million and 53 exceeding $10 million, totaling $2.76 billion in contracts [6]. Growth Potential - CEO Alex Karp emphasized that Palantir is at the beginning of its growth trajectory, noting that the company is now generating more profit in a single quarter than it previously did in total revenue [7]. - Fourth-quarter guidance projects revenue between $1.327 billion and $1.331 billion, with full-year revenue expected between $4.396 billion and $4.4 billion [9]. Valuation Concerns - The company's price-to-earnings ratio stands at 623, with a forward P/E of 217, and a price-to-sales ratio of 137, which are significantly higher than industry averages [10][12]. - The average P/S ratio for application software companies is currently 8.8, indicating that Palantir's valuation is considerably elevated [12]. Market Sentiment - Despite a strong earnings report, Palantir's stock fell 14% following the earnings release, driven by concerns over a potential AI bubble and the company's high valuation [2][10]. - Karp addressed detractors, suggesting that Palantir's growth offers retail investors returns previously accessible only to top venture capitalists [13]. Investment Perspective - While the numbers may appear daunting, the growth trajectory of Palantir suggests that current dips in stock price present valuable investment opportunities [14].

Core Insights - The article highlights that while Nvidia and Palantir are currently favored in the AI sector, there is a more attractive investment opportunity in Meta Platforms, which is less susceptible to market volatility and AI hype [1][12]. AI Market Potential - Artificial intelligence is expected to add $15.7 trillion to the global economy by 2030, indicating significant growth potential for companies involved in AI [3]. - The current phase of the AI revolution is likened to the early days of the internet, suggesting that there are still investment bargains available in AI stocks [4]. Nvidia and Palantir Analysis - Nvidia has a dominant position in the GPU market, holding over 90% market share in AI-accelerated data centers, and has a market cap of $4.541 trillion [6][7]. - Palantir's software is irreplaceable for military operations, leading to steady double-digit sales growth and long-term government contracts, with a market cap of $410 billion [7][9]. - Both companies face historical headwinds, including the risk of a bubble burst similar to past technology trends, and their high price-to-sales (P/S) ratios of 29 for Nvidia and 125 for Palantir indicate unsustainable valuations [8][11]. Meta Platforms as an Investment - Meta Platforms is positioned as a more stable investment, with 98% of its revenue derived from advertising, which is less affected by AI market fluctuations [15]. - The company boasts an impressive user base of 3.54 billion daily active users across its platforms, providing substantial ad-pricing power [13][14]. - Meta is utilizing AI to enhance its advertising effectiveness, which mitigates risks associated with an AI bubble [17]. - With over $44.4 billion in cash and a forward P/E ratio of 21, Meta is well-equipped to invest in growth initiatives without immediate pressure for returns [18][19].

Palantir's UK head, Louis Mosley, says the company is planning a "significant investment" in the UK to win military contracts https://t.co/sCPTEKVDEu ...

Palantir Technologies Inc.’s top British executive said it’s planning a “significant investment” in the UK to win military contracts, even as the software company has complained about slow traction in Europe. “The UK can be an epicenter of defense and military technology development,” Louis Mosley, Palantir’s UK head, told Bloomberg Television in a special episode on European defense. “It has all of those ingredients.” Most Read from Bloomberg Britain, like much of Europe, has set plans to increase mili ...

It's very hard to imagine a company trading north of 110 120 times revenues like Palanteer growing at 50 or 60% last quarter great amazing quarter kicking off cash. It's very hard not to imagine the next 2 years that doesn't have a significant correction. It's very hard to imagine that the AI capex boom doesn't have a significant correction.But going from that kind of armwy podcast statement to actually being able to make money on it, that's damn hard. ...

Market Overview - On November 13, the US stock market experienced a decline, with the Dow Jones Industrial Average closing at 47,457 points, down 797 points (1.7%) from the previous trading day. The index had briefly reached a historical high earlier that day before plummeting [2] - The Nasdaq Composite Index, heavily weighted with technology stocks, fell by 2.3%, exceeding the decline of the Dow Jones. The S&P 500 Index also dropped by 1.7%, with IT and consumer goods sectors leading the declines [4] AI Stock Performance - AI-related stocks, which had previously driven the market's upward trend, faced significant sell-offs. Notable declines included Oracle (down 4.1%), Nvidia (down 3.6%), Alphabet (down 2.8%), Amazon (down 2.7%), and Microsoft (down 1.5%). Palantir Technologies and Tesla saw even larger drops of 6.5% and 6.6%, respectively [4] - Concerns about an overheated AI market have been increasingly voiced by market participants, including prominent investor Michael Burry, who has raised doubts about the sustainability of AI-related stock valuations [4][5] Market Sentiment and Comparisons - There are growing comparisons between the current stock price trends and the internet bubble of the early 2000s. The simultaneous decline of the Nasdaq and Dow Jones indices on November 13 mirrors patterns observed during the internet bubble's burst [5] - David Rosenberg, founder of Rosenberg Research, noted that the contrasting movements of the Dow and Nasdaq indices are reminiscent of the internet bubble's collapse [5] - However, there is debate over whether AI stocks are genuinely in a bubble. Goldman Sachs analyst Eric Sheridan pointed out that discussions about bubbles are more prevalent now than in past economic bubbles, suggesting a potential difference in market dynamics [5] Investment Focus - Concerns have been raised about investors' excessive focus on AI, potentially overlooking opportunities in other sectors. Bank of America’s Savita Subramanian warned that this concentration could lead to missed investment opportunities outside of AI-related companies [5]

Core Viewpoint - The longest government shutdown in U.S. history has ended, but the stock market experienced significant turmoil, with fears exacerbated by economic data voids, mixed signals from the Federal Reserve, and a cooling AI market [1][6]. Group 1: Market Performance - The Dow Jones Industrial Average plummeted nearly 800 points, with major tech and chip stocks suffering severe losses [2]. - Tesla's stock dropped over 6%, resulting in a market value loss of $95.2 billion (approximately 675.5 billion RMB) in one night [3]. - Other notable declines included Intel down over 5%, and companies like Broadcom, Oracle, and AMD falling more than 4% [3][4]. Group 2: Economic Data and Federal Reserve Outlook - The market is now focused on delayed economic data, uncertainty regarding the Federal Reserve's interest rate cuts, and concerns over high-valuation tech stocks [7][8]. - The absence of the October Consumer Price Index (CPI) has created a significant economic data void, impacting market expectations for Federal Reserve rate cuts [11][9]. - Federal Reserve officials have expressed caution regarding interest rate cuts, with differing opinions on the timing and necessity of such actions [12][18]. Group 3: Michael Burry's Market Position - Notable short-seller Michael Burry has drawn attention for his significant short positions in Nvidia and Palantir, with a reported nominal value of over $1 billion [20][21]. - Burry later clarified that the reported short position was a media miscalculation, stating his actual investment was only $9.2 million [22]. - His recent criticisms of tech giants for alleged accounting manipulations have raised concerns about the sustainability of their profits [27].

Core Viewpoint - The uncertainty caused by the U.S. government shutdown is impacting the Federal Reserve's decision-making, leading to a risk-averse sentiment in the market, which has resulted in significant declines in high-growth and AI-related stocks [1][9]. Market Reaction - The U.S. stock market experienced its largest drop in nearly a month, with the Nasdaq 100 index falling by 2% and the S&P 500 and Dow Jones Industrial Average both down by 1.7% [3]. - High-growth stocks, particularly those favored by retail investors, saw their largest declines since April, with a notable drop in AI-related stocks [2][6]. Economic Data Impact - The government shutdown has delayed the release of key economic data, including unemployment claims and inflation figures, contributing to market anxiety [10]. - The lack of critical economic reports has left investors struggling to assess the economic landscape, further exacerbating market volatility [10]. Interest Rate Expectations - Swap traders have reduced the probability of a rate cut in December to approximately 50%, down from 72% a week prior, reflecting a shift in market sentiment [1]. - The uncertainty surrounding the Federal Reserve's future actions, particularly in light of high inflation and a weak job market, is a primary source of market anxiety [9][13]. Stock Performance - AI-related stocks have seen significant declines, with companies like Sandisk and Astera Labs dropping 14% and 8.4% respectively, while Nvidia and Broadcom also faced losses [6]. - The retail investor sentiment index has shown a notable decrease, with the Citi U.S. Retail Favorites Index down 6%, marking its largest drop since April [8].