Dr. Michael Burry might have bearish positions on Nvidia (NASDAQ:NVDA), Palantir (NASDAQ:PLTR), and a lot of worrisome things to say about the AI trade (spoiler alert: he thinks it’s in a bubble). But not everybody is in the same camp as him, and while only time will tell if the bulls or bears prevail with the names and the AI tech trade in general (bubble or no bubble?), I do think that it’s a good idea to have some perspective.
As a prospective investor in either company, I’d say it’s worth hearing out the bears as much as the bulls. And while the bears may seem a heck of a lot smarter, it’s really tough to tell who will come out on top. In the case of the bear camp, it arguably does not get smarter than Dr. Michael Burry, a man who was made famous from one of the most brilliant and contrarian bets of this generation.
Nvidia and Palantir might look expensive, but that doesn’t mean a crash is right around the corner
Apart from extended valuations, I don’t think Dr. Burry has unveiled anything that’s nearly as big as what he discovered many years prior to the 2008 stock market crash. In any case, Bank of America seems to be firmly in the bull camp with the two names that Burry is short. Notably, the bank labels shares of GPU maker Nvidia and AI data titan Palantir as buys going into the new year.
When it comes to Nvidia, it’s very lonely outside of the bull camps, at least as far as the analyst community is concerned. Apart from Burry and a select few skeptics on the sell side, it’s still popular to be a bull on the company in spite of greater competitive pressures from the likes of Google and its TPUs. As for Palantir, however, there are more skeptics with the name, likely because of its much higher valuation. Either way, Bank of America outlines some intriguing reasons why the two pricey but explosive growth titans might still have more room in the tank to march higher in 2026.
The case for staying bullish on Nvidia
Bank of America was right to stay bullish on Nvidia for 2025. And it doesn’t seem like the big bank is about to change its tune anytime soon. Analysts at the bank see “unrelenting” AI chip demand and other catalysts that could help drive shares to $275.
That entails a ton of upside from current levels, especially as the company moves through a difficult period en route to its next earnings reports. With a growing number of headlines surrounding the wave of competitive pressures (TPUs and beyond), it will certainly not be easy to stay in the name for a shot at that run towards a target that currently suggests more than 50% worth of upside.
As the AI revolution rolls on, betting against Nvidia still seems like it could be a money-losing proposition as we enter the new year. Even if Dr. Burry is right about his bear thesis, the trade might not unravel anytime soon.
The case for sticking with Palantir
Palantir seems like the tougher of the two stocks to own. However, Bank of America analysts see the name as a “best-in-class” AI enabler. Many smart analysts out there seem to think the same thing. And while there’s going to be plenty of scares with the name as bears take aim, I do think that the earnings results will dictate the trajectory of the stock.
There’s a good chance many may still underestimate the growth and margin expansion potential in the new year. With a fresh $255 price target (up from $215 per share), a gain of more than 40% may very well be looming. Either way, I don’t want to be buying put options on the name right here, especially given the giant question mark surrounding the growth acceleration potential of its AI Platform (AIP). It’s going to be big, but could it blast past expectations? That’s the big risk for the bears going into 2026.
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