Nvidia delivered a powerful rebuttal to its skeptics on November 10th, with shares surging 5.8% in a single trading session—the stock’s strongest performance since May. This impressive gain becomes particularly significant given recent market turbulence triggered by revelations of a massive bearish position against the chipmaker. The notable pessimist? Michael Burry, the legendary investor famous for his “Big Short” trade. Yet current fundamental indicators suggest Burry’s bearish stance might prove dramatically mistaken.
The $186 Million Short Position
Through his Scion Asset Management fund, Burry established a substantial bearish position during the third quarter, acquiring put options valued at $186.6 million against Nvidia. This translated to precisely one million contracts betting on declining share prices. When news of this position emerged last week, it sparked a technology sector selloff that erased 7.1% from Nvidia’s valuation. Initially, Burry’s timing appeared impeccable, coinciding with growing market concerns about AI sector overvaluation and potential bubble conditions.
However, the narrative takes an intriguing turn when examining Nvidia’s underlying business metrics, which appear to directly contradict the bearish thesis.
Unprecedented Demand Pipeline Reaches $500 Billion
During October’s GTC conference in Washington, CEO Jensen Huang revealed staggering demand projections that surpassed even the most optimistic analyst expectations. The company anticipates cumulative demand reaching $500 billion for its Blackwell and upcoming Rubin chip architectures through 2026. This projection provides unprecedented visibility extending over five quarters—a rarity in the semiconductor industry.
The scale of this demand becomes clearer through comparative analysis:
• Average quarterly demand requirement: $100 billion
• Current Q2 FY2026 Datacenter revenue: $41.1 billion
• Pipeline-to-performance ratio: 2.4 times current output
With Datacenter operations already constituting 88% of total revenue, the mathematical case for revenue doubling or tripling appears firmly grounded in actual order patterns rather than speculative optimism.
Should investors sell immediately? Or is it worth buying Nvidia?
Manufacturing Ramp Meets Extraordinary Demand
While demand metrics impress, production capacity remains equally crucial. Nvidia appears to be addressing this challenge aggressively, with CEO Jensen Huang confirming “very strong demand” for cutting-edge Blackwell processors during an event hosted by manufacturing partner TSMC. TSMC CEO C.C. Wei acknowledged Huang’s request for additional wafer capacity, though specific numerical targets remain confidential.
A critical competitive advantage lies in Nvidia’s comprehensive system architecture. Blackwell systems incorporate multiple chip types—including GPUs, CPUs, networking components, and switches—creating integrated solutions that reinforce long-term market positioning.
The memory supply chain demonstrates corresponding strength. South Korea’s SK Hynix has reportedly sold out its entire chip production capacity for next year while planning substantial capital expenditure increases. Meanwhile, Samsung is engaged in “advanced discussions” regarding supply of next-generation HBM4 memory to Nvidia.
November 19th Earnings: The Ultimate Verification
The upcoming Q3 FY2026 earnings report on November 19th will translate theoretical projections into concrete performance. Market experts anticipate earnings per share of $1.17, representing a 50% year-over-year increase from the $0.78 reported in the same quarter last year.
Given Nvidia’s forward P/E ratio of 29.9 alongside projected annual earnings growth of 40% over the next five years, current valuations appear relatively moderate. Even potential economic downturns seem unlikely to significantly impact Nvidia’s trajectory, as technology giants including Microsoft, Amazon, and Meta continue prioritizing artificial intelligence investments above virtually all other capital expenditures.
The central question facing investors isn’t whether Nvidia will continue growing, but rather the velocity of that expansion—and whether Michael Burry has placed his legendary contrarian bet on the wrong side of history.
Ad
Nvidia Stock: Buy or Sell?! New Nvidia Analysis from November 11 delivers the answer:
The latest Nvidia figures speak for themselves: Urgent action needed for Nvidia investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from November 11.
Nvidia: Buy or sell? Read more here...
