Why Is ‘The Big Short’ Michael Burry Still Targeting Nvidia?

▲ ‘The Big Short’ investor Michael Burry—why does he still take issue with Nvidia?/ChatGPT-generated image

Michael Burry, the “Big Short” investor who predicted the 2008 financial crisis, has once again sounded a warning, saying structural risks are increasing despite Nvidia’s explosive performance.

According to cryptocurrency-focused media outlet Finbold on February 26 (local time), Burry reviewed Nvidia’s (NVDA) fiscal year 2026 10-K report via his Substack and pointed to a sharp surge in long-term purchase obligations as a concern. Nvidia’s purchase obligations jumped from $16.1 billion a year ago to $95.2 billion. The increase stems from a rise in non-cancelable supply contracts tied to expanded semiconductor production and advanced packaging facilities.

Burry identified Nvidia’s relationship with Taiwan Semiconductor Manufacturing (TSMC) as a key variable. He explained that meeting demand for new technologies requires long-term commitments and prepayment terms, marking a departure from Nvidia’s past operating model. “Nvidia is placing non-cancelable orders before end demand is confirmed,” he noted, suggesting that this structure may represent not a temporary shift but a structural change in the company’s product development trajectory.

Nvidia also stated in its annual report that purchase obligations are expected to account for a larger portion of its supply structure going forward. Based on this, Burry argued that investors should carefully assess the potential for sustained changes in the company’s capital structure and operations. In other words, they need to examine how placing large orders before demand is confirmed could become a long-term burden.

Wall Street, however, remains bullish. In its latest quarterly results, Nvidia reported revenue of $68.13 billion, surpassing market expectations of $66.21 billion, while earnings per share (EPS) came in at $1.62, beating the projected $1.53. Bank of America’s Vivek Arya raised his price target from $275 to $300, and JPMorgan, Morgan Stanley, William Blair, and KeyBanc maintained buy ratings with 12-month price targets ranging from $260 to $275.

Nevertheless, the market reaction was cautious. NVDA shares fell 5.46% to $184.89 on the day. Despite the earnings surprise, concerns over the structural variable of surging long-term purchase obligations appeared to weigh on investor sentiment. It underscores how strong headline figures alone are not enough to fully ease investor anxiety.

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