“The Big Short” investor Michael Burry on Thursday raised doubts about Nvidia Corp.’s (NASDAQ:NVDA) stock trajectory following its second-quarter earnings, calling out a sharp disconnect between the AI giant’s fundamentals and market pricing.
Burry’s Valuation Warning
Pointing to the chipmaker’s compressed price-to-earnings ratio relative to its operational growth, Burry warned that while the stock appears “wildly undervalued” on paper with a “Low PE for a big grower that currently commands monopoly rents,” NVDA stock is ultimately “treading water compared to recent years’ performance.”
Wall Street’s Valuation Paradox
Burry’s commentary highlights a growing debate across Wall Street. Market strategists remain puzzled by the stock’s suppressed multiple at 32.11, according to Benzinga, despite its blowout performance.
Shay Boloor, Chief Market Strategist at Futurum Equities, recently highlighted a Raymond James note calling Nvidia’s valuation discount “fundamentally illogical.” Raymond James pointed out that Nvidia trades at less than 15 times estimated 2027 GAAP earnings, which is cheaper than the broader S&P 500’s 19 times multiple, even as it expands into central processing units.
Similarly, tech strategist Luke Lango told Benzinga that while sequential top-line growth momentum is cooling, Nvidia’s forward multiple near 18X sits near five-year lows while data center commitments continue to surge.
Record Beat Meets Skepticism
The valuation debate comes on the heels of another record quarter for Nvidia. The company posted second-quarter revenue of $96.22 billion, up 106% year-over-year, beating Wall Street expectations as CEO Jensen Huang declared that the “AI infrastructure buildout is at full steam.” Nvidia also issued a strong third-quarter revenue guidance of $108 billion.
However, Burry has persistently cautioned against reading Nvidia’s low multiple as a simple bargain. He previously slammed Nvidia’s $500 billion institutional credit financing push as a “Wall Street stunt” dependent on private credit schemes, while pointing to startup Etched as “serious competition for NVDA.”
To Burry, the stock’s muted price action proves that Nvidia’s current price is simply “not congruent with the market’s narrative.”
How Has Nvidia Performed in 2026?
NVDA shares rose 12.42% year-to-date, advanced by 15.34% over the last year, and gained 13.40% over the last six months. It closed 1.59% lower at $209.66 per share on Wednesday, and it was 5.91% higher in overnight trading.
Benzinga’s Edge Stock Rankings indicate that NVDA maintains a strong price trend in the short and medium terms and a weak trend in the long term, with a solid growth score.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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