Michael Burry Slams Tesla as ’Ridiculously Overvalued’ at 209× Forward Earnings, Blasts 3.6% Annual Stock Dilution
A legendary investor just threw a grenade into the EV party.
Michael Burry—the man who famously bet against the housing bubble—has turned his skeptical gaze toward Tesla. His verdict? The electric vehicle giant's valuation has entered the realm of fantasy.
The Price of Growth?
Burry's core critique hinges on a staggering earnings multiple. He points to a forward P/E ratio north of 200, a figure that makes traditional value investors break out in a cold sweat. For context, that's the kind of premium usually reserved for companies promising to cure aging or colonize Mars—not manufacture cars, no matter how sleek their software.
The Dilution Dilemma
The second prong of his attack focuses on shareholder equity. Burry highlighted the company's ongoing stock dilution, which chips away at existing ownership stakes year after year. It's a quiet tax on investors, funding growth by subtly reducing their piece of the pie—a classic move in the Silicon Valley playbook, where 'growth at all costs' often trumps capital discipline.
This isn't just a bearish take; it's a fundamental challenge to the narrative that has powered Tesla's meteoric rise. It questions whether the company's future profits can ever justify its current price tag, especially as competition in the EV space heats up globally. Burry's move is a stark reminder that in markets, gravity always wins—eventually. Sometimes the most innovative thing a company can do is actually turn a profit that justifies its valuation.
Burry takes shots at Musk’s playbook and Tesla’s shifting tech promises
In his post, Burry also criticized Tesla’s pattern of jumping from one futuristic tech promise to another. He pointed out how Musk fans were “all-in on electric cars until competition showed up, then all-in on autonomous driving until competition showed up, and now is all-in on robots, until competition shows up.”
Despite unloading all this, Burry did not say whether he’s currently holding any short or long position in Tesla stock. Burry has shorted Tesla before. So has Jim Chanos, who also voiced concerns recently, especially around Nvidia’s vendor financing tactics.
Burry’s message arrives just as Wall Street analysts have begun boosting their Tesla outlook. Last week, Melius Research called it a “must own,” largely due to its progress in chips and autonomy.
The week before that, Stifel lifted its price target and reaffirmed a Buy rating, citing Tesla’s growth in robotaxi tech and full self-driving (FSD) capabilities. That positive momentum hasn’t changed Burry’s stance at all.
Burry goes after Nvidia, says AI demand is a mirage
Last month, Burry trended after he revealed new short positions in both Nvidia and Palantir, using put options, a decision that bets their stock prices will fall.
Burry said Nvidia’s stock-based compensation has cost shareholders $112.5 billion, cutting their true earnings in half.
He accused AI companies of hiding depreciation on hardware, claiming they’re exaggerating how long their GPUs stay useful to justify massive spending.
Burry also suggested AI demand was artificially inflated, saying that many AI customers are basically funded by the same vendors selling them equipment, describing it as a circular financing scheme.
The short seller believes these customers are propped up just long enough to keep the illusion of demand going.
Nvidia quickly responded with a seven-page memo sent to Wall Street analysts, saying that Burry got the math wrong, mainly because he included RSU taxes, which inflated the costs.
Nvidia claims the real buyback figure is $91 billion, not $112.5 billion, and also insisted their employee compensation is “consistent with peers,” and clarified that they are not Enron.
Burry shot back: “I didn’t compare Nvidia to Enron.” Instead, he said the right comparison is Cisco in the late 1990s, when the company built more infrastructure than anyone needed, and saw its stock crash 75% once investors realized.
Since early 2023, Nvidia’s stock has gone up 12 times. Right now, its market cap sits at $4.5 trillion, putting it on track as the fastest company ever to reach that value. None of that has softened Burry’s skepticism. Even with record earnings, he thinks the underlying business model is shaky, and the growth story won’t last.
Burry’s record since 2008 has been all over the place. Yes, he called the housing crash early, which made his name. But since then, he’s been warning about collapse after collapse, often too early. That’s earned him the label “permabear.” He did make a smart MOVE buying GameStop early, but then he sold before the meme stock boom in 2021.
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