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Mark Cuban and Michael Burry warn Nvidia risk could ripple through US stocks
The investors pointed to a surge in credit default swap costs for Nvidia and noted its weight in the S&P 500 and broad US retirement portfolios.
Mark Cuban and Michael Burry are drawing attention to a potential fragility in the US stock market built around the artificial intelligence boom, arguing that disruption tied to Nvidia could spread beyond chip investors, according to Yahoo Finance.
Cuban said Nvidia has effectively become the key funding engine for the AI cycle and warned that an unexpected change in another chip provider, or a misstep, could destabilize the broader momentum, framing the risk as analogous to the dot-com era, Yahoo Finance reported.
Burry echoed the concern by pointing to market signals that he said reflect heightened credit risk for Nvidia, citing a sharp rise in the cost of insuring Nvidia debt against default via credit default swaps.
The article also highlighted that Americans had $9.9 trillion in 401(k) plans at the end of the first quarter, with $3.3 trillion in equity mutual funds, while IRAs held $4.2 trillion in equity funds, and it noted Nvidia’s roughly 7.3% weight in the S&P 500 alongside the sector concentration in technology and AI-related names, the outlet said.
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