I’m not touching it either, but you could point to 1300% revenue growth in one year and conclude that doesn’t have to continue very long before they are printing money.
Still, 31x sales is…a big number. And their operating margins are negative. Too hard pile for me.
Anthropic is making a massive bet that AI will transform the global economy more profoundly than industrialisation, electricity and the internet, according to its IPO prospectus.
And that will be what investors will be betting on.
Place your bets folks.
Burry’s opinion & guess.
The investor, famous for his big short on the U.S. housing market prior to the global financial crisis of 2007 – 2009, is switching to put options from short positions on key AI stocks, giving him more cost-effective leverage over a shorter time horizon, he said.
“Fundamentally, I am moving timelines up,” Burry wrote in his Monday investment newsletter. “As such, I want more leverage in my short positions. Better timelines make leverage more palatable. Nothing says leverage like options, in this case put options, which are relatively cheap due to exceptionally tight volatility measures such as the VIX.”
Some of his moves were intended to reduce his tax liability, he said, but most of it was because he thinks “the bubble in AI may burst sooner than later.” Burry’s new put-heavy positions suggest the AI trade could flip by next summer.
“It would take only a season in which AI revenue disappoints the capital expenditure underwriting it. In that scenario, a handful of boards, predisposed to redeploy capital toward the highest-conviction bet, would simply need to conclude that the highest-conviction bet has shifted. The legal documents contemplate that decision,” the Ares report says.
Burry backs his opinion with put bets.
Pure AI companies are likely to go belly up but the hardware infrastructure remains. My AI bets, beyond Tesla, are datacenter related such as SMCI. Buy the shares, sell the covered calls. While the calls might limit the capital gains° the premiums more than make up. Since these stocks are part of the AI craze the call premiums are high. Lots of players betting on these stocks.
The Captain
° I’ve been adjusting the calls selling lower deltas.