Trade Idea: Google + PLTR Pair Trade

Warren Buffett's Berkshire Hathaway recently made a large investment in Alphabet, the parent company of Google, for the first time. The purchase of approximately $4.9 billion worth of shares, revealed in a recent 13F filing, is significant because it is an unusual move for Berkshire, which typically avoids tech stocks. This decision is likely driven by Alphabet's strong AI developments, its dominant search business, and its growing Google Cloud segment, which analysts believe has become a key growth engine. 

As of November 2025, Michael Burry's hedge fund, Scion Asset Management, had disclosed a significant short position in Palantir, purchasing put options against the company. This bet signaled his skepticism regarding the high valuations of AI-related stocks. Details of the short position:

• Bet against AI: In his third-quarter filings for 2025, Burry's Scion Asset Management revealed massive put options against Palantir and Nvidia, suggesting he believes the AI market is experiencing a bubble.
• Fund deregistration: Despite taking this position, Burry later announced he was shutting down his hedge fund for outside investors, Scion Asset Management, to manage his own capital privately. He stated his valuation views were out of sync with the market.
• Specifics of the bet: Burry clarified on X that he had spent $9.2 million on put options that would allow him to sell Palantir stock at $50 apiece in 2027. This bet had a much larger notional value of $912 million, which had been the initial market focus.
• Market impact: The disclosure of Burry's short position contributed to a recent downturn in Palantir's stock price.
• Response from Palantir: In response, Palantir CEO Alex Karp accused short-sellers, including Burry, of market manipulation, though Karp's comments overlooked Palantir's high valuation.