‘The Big Short’ investor issues a dire warning about Nvidia. Here’s why he believes an ‘aggressive fall’ is coming, and how businesses can avoid the same fate

Michael Burry, known for his successful short position against the housing market, has issued a dire warning regarding Nvidia, suggesting the company is exhibiting concerning financial indicators and is poised for an "aggressive fall." Burry, who previously shorted Nvidia, highlighted in Substack posts on May 25 and May 22 that the artificial intelligence chip manufacturer's customer concentration is exceptionally high. According to Burry's analysis of Nvidia's recent earnings report, its three most active customers represent 64% of its accounts receivable, an increase from 56% in the previous quarter. Furthermore, Nvidia's largest customer now contributes more to accounts receivable but less to overall revenue, a shift that has not occurred in over three years. Burry described this situation not as a definitive problem, but as a significant warning sign. This situation serves as a cautionary tale for business owners in other sectors, emphasizing the risks associated with high customer concentration. Relying too heavily on a few major clients can create vulnerability, potentially leading to investor suspicion and negative consequences if those clients reduce their business.