Michael Burry Warns Nvidia’s AI Rally Could Mirror RCA’s 98% Collapse
Michael Burry warned that Nvidia’s AI-driven rally could mirror Radio Corporation of America’s 1920s boom-and-bust, noting RCA shares plunged 98% after a 200-fold surge. Nvidia is due to report Q4 results Wednesday, while concerns over heavy AI data-center spending pressuring cash flow intensify.
1. Burry's RCA Analogy
Michael Burry compared Nvidia’s rapid AI-driven stock surge to the speculative mania around Radio Corporation of America in the 1920s, arguing that even long-term industry dominance did not prevent RCA’s shares from collapsing.
2. Historic RCA Boom-and-Bust
RCA stock rose roughly 200-fold in the late 1920s before plummeting from 114.75 in 1929 to 2.625 by 1932, a 98% decline that underscored the risks of speculative bubbles.
3. Upcoming Q4 Earnings Release
Nvidia is scheduled to announce its fourth-quarter financial results on Wednesday after market close, a critical update that may confirm or challenge current AI demand projections.
4. AI Capex and Balance-Sheet Risks
Burry also raised concerns that massive spending on AI data-center infrastructure could erode Nvidia’s cash flow and increase borrowing, potentially squeezing margins if investments fail to deliver expected returns.