“Shades of John Chambers,” Burry wrote in an X post about Nvidia, referring to the person who helmed Cisco during its boom years until the 2000 dot-com bust.

  • Burry's implication is that Huang’s narrative sounds similar to Cisco’s during the internet boom.
  • When the dot-com bubble burst, many internet startups and telecom companies, the biggest buyers of Cisco’s equipment, either slashed their capital spending or went bankrupt.
  • NVDA trades on Monday were also influenced by a series of partnership news.

Ace investor Michael Burry, who has been shorting Nvidia stocks since late last year, on Sunday compared the chipmaker’s trajectory to Cisco’s boom and bust during the dot-com bubble.

Burry replied to a post about Nvidia CEO Jensen Huang speaking about shortages of memory chips and constraints in land and labor markets plaguing the chip industry with a comment: “Shades of John Chambers.”

Burry Compares Nvidia To Cisco Under John Chambers

Chambers was Cisco’s CEO throughout the late 1990s technology boom. As internet infrastructure spending surged, Cisco repeatedly said it was struggling to keep up with overwhelming demand for its networking equipment. 

Investors took those supply constraints as evidence that demand would remain exceptionally strong for years, helping drive Cisco’s valuation to extreme levels at the time.

When the dot-com bubble burst in 2000, many internet startups and telecom companies – the biggest buyers of Cisco’s equipment – either slashed their capital spending or went bankrupt. Cisco’s orders dried up much faster than expected, its customers were left with excess inventory, and the company had to write down billions of dollars’ worth of unsold products and components.

Cisco’s stock famously lost more than 80% of its value over the following two years.

Burry's implication is that Huang’s narrative sounds similar to Cisco’s during the internet boom. Although he isn’t necessarily predicting Nvidia will suffer the same fate as Cisco, he is reminding investors that supply-constrained booms can sometimes foster overly optimistic expectations that later prove unsustainable.

Burry is one of the most notable investors who has a short position in Nvidia. Last week, he said he continues to hold Nvidia puts “in good size,” adding that he believes much of the current and future demand is not being driven by end customers. 

NVDA Stock Move, Retail View

Nvidia stock rose 2% last week and was up 1.1% in Monday’s overnight trading, amid a broader market rebound after no strikes were reported between the U.S. and Iran over the last two days. On Stocktwits, the retail sentiment for NVDA dipped in the past week and was ‘bearish’ as of early Monday.

Trading in the stock was also influenced by a slew of partnership news around Nvidia.

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