Two of the most dramatic short sellers in Wall Street history catch investors’ attention.

Paul Tudor Jones, who foresaw Black Monday in 1987, and Michael Burry, the real-life protagonist of the movie Big Short, who went on a massive short sale warning of the AI bubble in 2025.

Paul Tudor Jones cool-headedly analyzed the charts in the summer of 1987 when the market hit a new historical high and everyone was intoxicated.

He and his chief strategist Peter Borish found a striking similarity, comparing the 1987 market to the pattern just before the 1929 Great Depression.

Valuations were excessively high, investor optimism was at its peak, and leverage exceeded risk levels.

He made a large-scale purchase of put options by recording his judgment in front of the documentary camera.

His bets became a reality on October 19, 1987, when the Dow plunged 22.6% in one day, and he made about $100 million.

In 1987 his fund returned 125.9% after deducting fees.

Jones combined technical analysis with market sentiment to read investors’ fears and greed.

Michael Burry, on the other hand, reads the overvalued market value through financial statements and industry analysis.

As the Generative AI craze was driving Nvidia and other tech stocks to record astronomical market capitalizations, he noted the gap between real profitability and valuation.

Michael Burry’s 2025 AI Short Sale Is A Huge Bet, Total $1.1 Billion.

His hedge fund Sion Asset Management had put options positions worth approximately $912 million in Palantir and $187.6 million in Nvidia as of Sept. 30.

This represents nearly 80% of his total portfolio.

But the difference between the two is even more stark.

Paul Tudor Jones’ Black Monday bet was perfectly timed.

He took the position just before the market crash and won in a matter of weeks.

On the other hand, Bury is repeating his failures at the timing.

He took a position too early and AI stocks continued to rise as if to laugh at his expectations.

Nvidia remained above its end-September price throughout the third quarter, and Palantir was barely even close to breaking even if it had positioned itself from its August peak.

Considering the decrease in the time value of the option, analysts say that Nvidia will have to fall 7% and Palantir will have to fall 5% more to reach a break-even point.

During the global financial crisis, he started betting on housing bubbles in mid-2005, but he suffered from strong customer opposition and repurchase pressure for about two years before the bubble actually burst.

It wasn’t until mid-2007 that things started to play out as he predicted that he could personally bring in $100 million and more than $700 million to his customers.

So what strategy is Paul Tudor Jones taking now.

Interestingly, he’s not shorting, even though he sees the current situation almost the same as the dot-com bubble in 1999.

He says circular transactions or vendor financing in the AI sector make him nervous, but he said he will hold gold, cryptocurrency and Nasdaq technology together by the end of the year.

This is to make profits in the last bull market before the bubble bursts.

He sees no imminent decline and believes there is still room for gains before the bull market reaches its final stage.

In fact, the change in his portfolio clearly reveals this strategy.

In the second quarter of 2025, it sold all 175,212 shares of Palantir and instead bought 905,700 shares of quantum computing company Liggeti Computing.

This investment is not just a directional bet with a hedge position that includes both call and put options.

It also bought 1.47 million shares of AI infrastructure company Eireen in the second quarter at an average price of $10.05, with the stock rising to near $67 for a return of more than 560%.

However, unlike Black Monday or dot-com bubbles, AI is creating actual productivity improvements, and no one knows when the peak of the bubble will arrive.

Paul Tudor Jones remains a legend of perfect execution in the present progressive, but Michael Burry is still in the midst of pain.

Jones acknowledges the bubble but takes a sophisticated approach, investing in gold, cryptocurrencies and Nasdaq technology stocks to make a profit in the final bull market, while simultaneously using hedge strategies.

Time will answer whether Burry will prove right once again or admit his judgment was wrong this time.

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