NVDA : Crushed by Burry's Short and More ... ?
The market landscape in December 2025 is currently defined by a "clash of titans": (1) bearish conviction of Michael Burry vs (2) structural demand for AI infrastructure.
While the "AI Bubble" narrative has gained significant traction, reality is more nuanced than a simple "true or false" verdict.
For a start, let’s look at how Nvidia’s fundamentals & technicals stack up against the market’s current "rut".
For that, I defer to NVDA and its 2 closest competitor - $Broadcom(AVGO)$ and $Advanced Micro Devices(AMD)$ (see below)
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Nvidia’s P/E of 42.2 is lower than both Broadcom and AMD. (see above)
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Although Burry calls this a bubble, market bulls point to the 111% Return on Equity (ROE) as evidence that NVDA is not a hype story but a highly efficient cash-printing machine.
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The "rut" in price has actually made NVDA the "cheapest" it has been relative to its earnings in months.
Performance & Timeline (Oct – Dec 2025)
Nvidia's share price has indeed been in a "rut" since its peak, struggling with psychological resistance and geopolitical uncertainty.
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29 Oct 2025 - The peak of AI fervor was also NVDA’s all-time high of $207.03 per share.
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04 Nov 2025 - Burry's 13F was revealed and NVDA had an adverse reaction to Scion's short positions. NVDA ended the day at $198.
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13 Nov 2025 - Burry deregisters and shuts his Scion funds, effectively in radio silence and move to a "newsletter" model (instead), fueling bubble fears. NVDA fell further to $186.00.
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22 Nov 2025 - "Fraud" rumors peaked with active social media & analysts debating "circular economy" (NVDA funding its own customers) thesis. NVDA continued its downwards trend at $178.00.
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03 Dec 2025 - NVDA’s CFO Colette Kress confirmed the $100 billion OpenAI deal is not yet finalized, further fueling the AI bubble rumours. In a ‘surprise’ twist, NVDA recovered to $180.
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12 Dec 2025 - After ‘intense’ lobbying, Trump approved conditional sales of NVDA’s H200 chips to China , (however) with a 25% US fee. The ‘good & bad’ news caused NVDA to tumble to $177.
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17 Dec 2025 - NVDA is still below its 50-day moving average ($186.62).
Technical Analysis.
Nvidia is currently in a precarious technical position.
The stock is trading at $170.94, struggling to find a solid base after its October peak closing price of $212.19.
As of 17 Dec 2025
(1) Immediate Support ($164 – $167):
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This is the current battleground.
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Technical indicator like the Relative Strength Index (RSI) is at 37, which is closer to "oversold."
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Additionally, a "Head and Shoulders" pattern has formed with a neck-line break at $176, signaling further downside risk.
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If NVDA falls below $164, it will trigger a strong “Sell" signal for algorithmic traders.
(2) The 200 -day moving average"Magnet":
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Most analysts believe NVDA is being pulled toward its 200-day simple moving average (SMA).
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This is the ultimate "floor."
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If NVDA touches $150 level, it would represent a healthy -27% correction from the highs, often a point where institutional "whales" step back in to buy.
(3) Resistance Level:
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To break the "rut," NVDA must reclaim its 50-day moving average that is at $186.
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Until then, any upward move is likely just a "dead cat bounce".
Agents of Rotation - US Jobs & Inflation.
Other "silent” killers of NVDA’s tech rally have been US economic reports out in December 2025.
(1) Jobs Report.
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On 16 Dec 2025, the latest US Jobs reports (November 2025) were dropped.
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The +64,000 jobs added have beaten market expectations of 45,000.
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However, US unemployment rate rose to 4.6%, from September’s 4.4%.
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This "stagflationary" clearly shows rising unemployment despite job growth.
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It has caused a massive rotation out of Tech and into "Defensive" sectors like Healthcare (Pfizer) and Energy (Halliburton), the exact sectors where Burry’s Q3 13F revealed new call options.
(2) Consumer Price Index Inflation.
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With the CPI report pending, the market is pricing in "sticky" inflation.
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For NVDA, this is compounded by the 25% US "Security Fee" on China-bound chips.
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This fee acts as a synthetic tariff, potentially cooling the demand Nvidia needs to justify its 2026 revenue targets.
(3) The $Oracle(ORCL)$ Effect.
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ORCL's 10 Dec 2025 earnings miss of $16.1 billion revenue vs $16.2B expected, has sent shockwaves through the sector.
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CEO Ellison’s further comments on "chip neutrality" and buying from non-Nvidia sources further reinforced Burry’s thesis.
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ORCL stock price has fallen by over -10% in a single session, following the announcement, dampening the S&P 500 index.
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Between 10 Dec 2025 ($221.53) when earnings were announced until 17 Dec 2025 ($178.46), stock price has fallen by -19.44%.
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Hopefully, things will change for the “better”, with the setup of US Tik Tok to ringfence US data within local grounds.
Objectively speaking, the reason NVDA is in a "rut" isn't just because of Burry’s tweets; it is also because US macro environment has turned hostile for high-valuation tech.
NVDA - Winter Storm or Santa Rally?
I guessed above question is on every investor’s mind.
Case of Winter Storm.
(1) No China Order Confirmation:
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Despite the H200 approval, there is no official word of massive Chinese orders.
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As mentioned in my previous post, Beijing is reportedly encouraging domestic firms to use local chips Huawei Ascend or Biren, to avoid dependence on “western” chips.
(2) OpenAI Fragility:
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CFO Kress noted that current 2025-2026 revenue projections for Blackwell do not yet include OpenAI demand, meaning a stall in the deal could see NVDA slide toward the $150 floor.
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At the same time, it could also tarnish perception of "infinite demand" for Nvidia's Rubin platform (arriving 2026) calling it into questioned.
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Many analysts also believe further delay to OpenAI funding could see NVDA slide toward the $150 floor before the year ends.
Case of Santa Rally.
(1) Historical Trends:
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Historically, the "Santa Claus Rally" yields positive returns of +79% of the time between Dec 27 and Jan 2].
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There is still hope as there is 8 days to go, no ?
(2) $Micron Technology(MU)$ Catalyst ?
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On 18 Dec 2025, MU posted a massive earnings beat with $18.7 billion revenue guidance, that analysts are calling a "Nvidia Moment" that could lift the entire semiconductor sector.
(3) Alternatives:
NVDA will need a "miracle" headline before 24 Dec 2025 in the form of either
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A signed $50 billion or more purchase order from Chinese cloud provider ($Alibaba(BABA)$ / $Tencent Holding Ltd.(TCEHY)$). Or
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A finalized $100 billion OpenAI funding round (as confidence booster).
(4) Valuation:
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On a brighter note, Morningstar rates NVDA as "undervalued" with a Fair Value Estimate of $240, suggesting over +30% upside from current levels.
My view points: (mine only).
Nvidia is currently caught in a technical no man's land.
Institutional buyers are likely to wait on the sidelines, letting Burry’s short play out and in the short term, NVDA could seeks its 200-day average ($156).
However, the fundamental strength suggests that Burry’s "Big Short 2.0" may be a tactical victory on a correction, rather than the end of the AI era.
If you vested in NVDA (like me), you will know that current pull back is only temporary. If NVDA continues to consolidate, it will turn into a cannot be missed “Buy” opportunity. Agree ?
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Do you think Burry’s accusation of the AI community is accurate ?
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I think that the market is starting to pump the brakes because of multiple red flags from other big players, as you've stated, the Oracle revenue miss and burning through their cash, then Openai wanting to go public but seemingly losing ground to competition, I think the bubble hasn't burst, but it feels like it won't be long now if the overexuberance is not scaled back
Great article, would you like to share it?