Michael Burry Nvidia Bet and Indian PMS: Why U.S. AI Stock Volatility Won't Impact Your Portfolio Management Services

Friday, Nov 14, 2025

Understanding Market Concerns Around Michael Burry's Bearish Position on Nvidia and Palantir | Portfolio Management Services in India 2025

Recent market developments have sent ripples across global investment communities. Michael Burry, the legendary investor who predicted the 2008 financial crisis (featured in "The Big Short"), has taken significant bearish positions against AI stocks Nvidia (NVDA) and Palantir (PLTR) through put options worth approximately $1.1 billion notional value. Simultaneously, prominent figures like Peter Thiel have reportedly sold Nvidia holdings, and renowned valuation expert Professor Aswath Damodaran has publicly stated that stock market valuations appear "insane," preferring gold investments over equities at current prices.These developments, widely discussed by financial influencers including CA Sarthak Ahuja and across social media platforms, have raised understandable concerns among Indian investors about potential spillover effects on Indian equity portfolios and Portfolio Management Services (PMS). This comprehensive guide addresses why your Indian PMS investments remain fundamentally insulated from U.S. technology stock volatility and AI bubble concerns.

Michael Burry's AI Stock Short: What Investors Need to Know

The Michael Burry Nvidia and Palantir Strategy Explained

Michael Burry's Scion Asset Management disclosed put options on approximately 5 million Palantir shares (notional value ~$912 million) and 1 million Nvidia shares (~$187 million) in Q3 2025 13F filings, representing roughly 80% of the fund's portfolio. These deep out-of-the-money LEAP puts function more as tail-risk hedges against an AI bubble burst rather than outright short bets.

Burry's core thesis centers on accounting concerns: he claims major tech companies like Microsoft, Google, Oracle, and Meta are depreciating GPU chips and AI server infrastructure over 5-6 years when rapid technological advancement renders them obsolete in 1-2 years, potentially overstating earnings and inflating valuations.

Peter Thiel Nvidia Sale and Aswath Damodaran's Market Warning

Adding to market anxiety, Founders Fund co-founder Peter Thiel reportedly liquidated approximately $100 million in Nvidia holdings, while Professor Aswath Damodaran (often called the "god of valuation") publicly stated he would "rather invest in gold than stock markets" at current valuation levels. These high-profile moves have amplified concerns about U.S. technology stock valuations, particularly AI-focused companies.

Why Indian Portfolio Management Services Are Different: Zero U.S. AI Stock Exposure

The India Investment Landscape: Fundamentally Distinct from U.S. Tech Markets

When discussing Indian equity PMS investments, it's essential to recognize we operate in a fundamentally different ecosystem from U.S. markets. India's economic growth trajectory is powered by domestic consumption, infrastructure development, government capital expenditure, and structural reforms, not by Silicon Valley tech giant fortunes or AI hype cycles.

Key differentiators for Indian PMS portfolios:

• Zero exposure to Nvidia, Palantir, or U.S. AI stocks: Indian PMS strategies invest exclusively in companies listed on NSE (National Stock Exchange) and BSE (Bombay Stock Exchange)
• Domestic revenue streams: Portfolio companies generate rupee-denominated revenues from Indian customers, not dependent on global technology adoption cycles
• Local growth drivers: Performance tied to India-specific factors like monsoon patterns, government policy, GST reforms, RBI monetary policy, and expanding middle-class consumption

Understanding FII Flows and Market Correlation: The Real Impact on Indian PMS

Debunking the Market Correlation Myth

Market commentators frequently cite correlation coefficients between Indian indices (Nifty, Sensex) and U.S. markets (S&P 500, NASDAQ) to suggest inevitable contagion during American market downturns. While short-term sentiment linkages exist primarily through foreign institutional investor (FII) flows, actual correlation is far more nuanced.

Historical evidence of India's resilience:

• When NASDAQ fell 33% during the 2022 technology selloff, Nifty declined only 4%, supported by domestic institutional buying and strong corporate earnings in banking and energy sectors
• In January 2025, despite FII net selling amid global uncertainty, domestic institutional investors (DIIs) poured ₹6.1 trillion into Indian markets, cushioning impact
• India's stock market capitalization to GDP ratio increased from 95% in 2020 to 125% in 2025, reflecting deepening domestic capital market penetration

Domestic Liquidity Transformation: Why FII Outflows Matter Less Now

The post-pandemic explosion of retail investor participation has fundamentally altered Indian market dynamics. Millions of new demat accounts, systematic investment flows through mutual funds, and growing equity awareness have created a robust domestic liquidity cushion against foreign investor sentiment shifts.

Recent domestic liquidity indicators:

• Domestic mutual fund inflows reached ₹27,000 crore monthly as of August 2025
• July 2025 saw record equity mutual fund flows of ₹42,702 crore (USD 4.91 billion)
• Even during Michael Burry's Nvidia disclosure causing 4% NVDA decline, Indian markets demonstrated relative stability

Portfolio Management Services Advantages During Market Volatility

Why PMS Outperforms During Global Uncertainty

Portfolio Management Services offer structural advantages that become particularly valuable during periods like the current Michael Burry AI stock controversy and associated market volatility. Unlike mutual funds tracking benchmark indices or maintaining large-cap biases, PMS strategies employ concentrated portfolios (typically 15-25 stocks) selected through rigorous fundamental analysis.

PMS structural benefits over mutual funds:

1. Uncorrelated investment opportunities: Mid-cap manufacturing firms, regional banks, specialized industrial companies naturally exhibit lower correlation to global tech narratives like AI bubble concerns
2. Active risk management flexibility: During sentiment-driven corrections (FII-led selloffs), PMS managers deploy hedging strategies, rebalance toward defensive sectors, or opportunistically accumulate quality stocks at discounted valuations
3. Direct ownership tax efficiency: PMS clients hold securities in personal demat accounts, enabling tactical capital loss harvesting and customized portfolio adjustments impossible in pooled vehicles
4. Proven volatility resilience: Long-short PMS strategies averaged only -1.45% during January 2025's market pressure compared to -6.52% for long-only strategies

Green Portfolio PMS Strategies: Domestic Focus, Zero AI Bubble Exposure

Our Portfolio Management Services Investment Philosophy

At Green Portfolio, our PMS offerings emphasize Growth at Reasonable Price (GARP) principles, ensuring valuation discipline while pursuing quality and growth opportunities exclusively within the Indian equity market. Our research process examines corporate governance, marketing strategy, R&D investment, industry dynamics, key company fundamentals, competitive positioning, and promoter integrity.

Green Portfolio Special Fund: Multi-Bagger Identification Strategy

Our flagship PMS strategy focuses on identifying companies with exponential growth potential through disciplined fundamental analysis. Performance drivers include corporate governance quality, product innovation capabilities, R&D investments, competitive positioning, and stakeholder feedback, completely independent of U.S. technology cycles or overseas AI narratives.

Key differentiators:

• Zero correlation to Nvidia GPU demand or Palantir AI software adoption
• Focus on promoter integrity and domestic market dynamics
• Track record of multi-bagger stock identification in Indian markets

Super 30 Fund: Concentrated High-Conviction PMS Portfolio

This focused approach capitalizes on India's highest-conviction opportunities across market leaders and emerging champions. Growth stems from sector leadership, execution capabilities, and structural tailwinds specific to the Indian economy. The concentrated 30-stock nature allows deep fundamental research into business models, management quality, and economic moats, factors entirely unrelated to Silicon Valley valuations or Michael Burry's tech stock concerns.

Dividend Yield Fund: Stable Income PMS Strategy

Our dividend-focused PMS invests in cash-generating businesses with sustainable payout policies, benefiting from earnings stability, free cash flow generation, and dividend consistency. Portfolio companies typically operate in banking, energy, utilities, and consumer staples sectors, where performance depends on domestic demand, RBI regulatory frameworks, and operational efficiency, not foreign investor sentiment about AI stocks.

MNC Advantage Fund: Global Expertise, Indian Market Focus

This PMS theme captures the unique positioning of multinational corporation subsidiaries operating in India, combining global best practices with local market access. Success factors include technology transfer benefits, parent company support, brand strength in Indian markets, and preferential innovation access. These companies serve Indian customers and generate rupee-denominated revenues, making business performance immune to what happens with U.S. tech stock valuations like Nvidia or Palantir.

Impact ESG and Shariah Funds: Values-Based PMS Investing

Our sustainable and ethical PMS strategies focus on companies demonstrating environmental responsibility, social impact, governance excellence, or Islamic finance compliance. Performance drivers include sustainability leadership, ethical business practices, stakeholder value creation, and alignment with India's ESG policy framework, completely disconnected from short-term global market speculation about AI bubbles or tech accounting concerns.

What Drives Returns in Indian PMS: Domestic Fundamentals, Not U.S. Tech Narratives

Banking and Financial Services PMS Holdings

Indian banking sector performance depends on credit growth (currently 11-13% annually), asset quality metrics (gross NPA ratios), net interest margins influenced by RBI policy decisions, and financial inclusion initiatives. These fundamentals have zero correlation to Federal Reserve decisions, Nvidia GPU depreciation accounting, or U.S. tech valuations.

Infrastructure and Construction PMS Investments

Growth in infrastructure holdings comes from government capital expenditure budgets (National Infrastructure Pipeline), order book execution capabilities, commodity price management, and project timelines. Success factors are entirely domestic, with minimal exposure to global technology cycles or AI adoption rates that concern Michael Burry.

Consumer Discretionary and Staples in PMS Portfolios

Performance drivers include rural income growth (agricultural support prices), urban consumption patterns (festival demand, premiumization trends), competitive positioning within India, and distribution network strength. U.S. investor sentiment about artificial intelligence companies has negligible impact on whether Indian consumers purchase FMCG products or discretionary goods.

Manufacturing and Industrials: PLI Scheme Beneficiaries

Indian manufacturing PMS holdings benefit from Production-Linked Incentive (PLI) schemes, "Atmanirbhar Bharat" initiatives, China+1 supply chain realignment bringing global manufacturing to India, and domestic industrial demand. These companies operate in ecosystems shaped by trade policy and domestic demand, not Silicon Valley innovation cycles or concerns about GPU chip obsolescence.

Addressing Investor Concerns: Asset Allocation vs. Portfolio Diversification

Understanding the Diversification Discussion

Recent market commentary (including discussions around Michael Burry's positions and Aswath Damodaran's warnings) has emphasized asset allocation beyond equities, incorporating gold, bank deposits, and other asset classes to manage risk. This is sound advice for overall wealth management based on individual risk profiles and liquidity needs.

However, it's crucial to distinguish between:

Portfolio diversification: Spreading equity investments across sectors and stocks to reduce concentration risk (already achieved in well-constructed PMS portfolios through sector exposure limits and position sizing discipline)

Asset allocation: Balancing equities with debt, gold, and other assets based on financial goals and risk tolerance (a broader wealth management decision)

Long-Term PMS Investment Perspective: 12-15% Annualized Returns

Over 5-10 year investment horizons, Indian equities have delivered 12-15% annualized returns across market cycles, driven by compound earnings growth and multiple expansion during economic upswings. Short-term volatility triggered by FII flows, global risk-off sentiment (like reactions to Michael Burry's AI stock bets), or geopolitical events creates noise but rarely derails long-term wealth creation for investors committed to quality businesses in growing economies.

Indian Market Outlook 2025: Structural Growth Drivers Intact

India's GDP Growth Trajectory

India's economic growth projections of 6.5-7% for FY26 remain robust despite global headwinds, reflecting an economy driven by indigenous factors including monsoon patterns, government infrastructure spending, GST reforms, digital payment adoption, and expanding middle-class consumption.

Policy Catalysts Supporting Indian Equities

• Production-Linked Incentive (PLI) schemes across 14 sectors including electronics, automobiles, pharmaceuticals, textiles
• National Infrastructure Pipeline with ₹111 lakh crore investment target through 2025
• GST rationalization simplifying tax structures and improving compliance
• RBI monetary policy expected rate cuts supporting credit growth and corporate profitability

China+1 and Global Manufacturing Shift

India benefits significantly from global supply chain diversification, with multinational corporations establishing manufacturing bases as alternatives to China. This structural trend supports industrial PMS holdings regardless of U.S. technology stock volatility or AI bubble concerns

Why Michael Burry's Track Record Shouldn't Drive Your PMS Investment Decisions

Post-2008 Performance Reality

While Michael Burry famously predicted the 2008 subprime mortgage crisis (earning fame from "The Big Short" book and movie), his post-2008 track record is mixed. Scion Asset Management returned approximately -1.2% annualized through 2024, significantly underperforming benchmarks. Burry's contrarian style often results in being early (sometimes by years), missing interim market rallies.

Current Position Is a Hedge, Not a Conviction Bet

Burry's put options on Nvidia and Palantir are deep out-of-the-money LEAPs, functioning as tail-risk insurance rather than outright short positions. Maximum downside is the premium paid (~$50-100 million), not the sensationalized $200 million "bet" figure circulating on social media.

Accounting Claims Lack Regulatory Validation

Burry's assertion that tech companies manipulate earnings through extended GPU depreciation schedules remains theoretical. No SEC investigations, accounting restatements, or regulatory actions have emerged supporting these claims. GAAP accounting standards allow companies to determine asset useful life based on business use patterns.

FII Outflows and Indian Market Resilience: Historical Context

2025 FII Flow Patterns

Foreign institutional investors have been net sellers in Indian markets during 2025, with approximately $20 billion in outflows year-to-date. However, this has been more than offset by record domestic institutional investor (DII) inflows, demonstrating reduced dependency on foreign capital.

Wealthy Investor Allocation to Alternative Strategies

High net worth individuals increasingly allocate to Portfolio Management Services and Category III Alternative Investment Funds (AIFs) precisely to hedge against volatility stemming from FII flows and global market uncertainty. These sophisticated investors recognize temporary price dislocations don't reflect fundamental business quality.

Key Takeaways for PMS Investors: Focus on What Matters

Questions That Determine PMS Investment Success

Rather than worrying about what Michael Burry thinks about Nvidia accounting or whether Peter Thiel is selling tech stocks, focus on factors that genuinely impact your Portfolio Management Services returns:

1. Business fundamentals: Are portfolio companies growing revenues, maintaining margins, and generating cash flows?

2. Sectoral positioning: Is your PMS portfolio exposed to India's structural growth drivers?

3. Valuation discipline: Are holdings priced reasonably relative to earnings growth potential?

4. Manager capability: Does your PMS manager demonstrate consistent stock selection and risk management?

These determinants matter infinitely more than investment decisions by high-profile global investors in unrelated markets.

India's Equity Market Maturation

India's equity markets have matured significantly, supported by stronger SEBI regulatory frameworks, deeper domestic liquidity, broader corporate universe, improved corporate governance standards, and growing retail investor sophistication. For PMS investors committed to capturing this growth through professionally managed, concentrated portfolios, the path forward remains focused on domestic fundamentals rather than overseas headlines about AI stocks or tech bubble concerns.

Conclusion: Separating Signal from Noise in Portfolio Management Services

Global market developments will always create headlines and spark concerns. Michael Burry's bearish positions on Nvidia and Palantir, Peter Thiel's reported sales, and Aswath Damodaran's valuation warnings represent legitimate perspectives on U.S. technology market valuations and AI bubble risks. However, successful PMS investing in India requires separating signal from noise and maintaining focus on what genuinely impacts your portfolio returns. For investors in Indian equity Portfolio Management Services with zero exposure to U.S. AI stocks, these developments represent temporary global market sentiment shifts, not fundamental threats to domestic equity performance. India's 7% GDP growth, demographic advantages, policy support, infrastructure buildout, and corporate earnings trajectory create a multi-decade wealth creation opportunity that transcends short-term volatility triggered by overseas investor positioning. The critical questions aren't about U.S. technology stock accounting practices or GPU chip depreciation schedules. They're about whether your PMS portfolio reflects quality Indian businesses positioned to benefit from India's structural growth story, whether your asset allocation matches your financial goals and risk tolerance, and whether you have conviction to stay invested through inevitable market cycles. For investors who can answer these affirmatively, short-term global market noise stemming from Michael Burry's AI stock bets becomes exactly what it is: temporary volatility in a long-term Indian equity wealth creation journey through professionally managed Portfolio Management Services.

About Green Portfolio PMS

Green Portfolio offers SEBI-registered Portfolio Management Services focused exclusively on Indian equity markets, with zero exposure to U.S. technology stocks or AI-related securities. Our strategies include the Special Fund (multi-bagger identification), Super 30 (concentrated quality holdings), Dividend Yield Fund (income and stability), MNC Advantage (global expertise with Indian focus), and Impact ESG/Shariah funds (values-based investing). All strategies emphasize Growth at Reasonable Price (GARP) principles, fundamental research, and domestic growth drivers. For more information about how our PMS strategies remain insulated from global tech volatility while capturing India's growth opportunity, contact our investment advisory team.