The Big Short investor warns that Nvidia's top three customers now represent 64% of accounts receivable, up from 33% in 2020.
Michael Burry, the investor who became a household name by betting against the US housing market before the 2008 financial crisis, is now turning his attention to one of the most celebrated companies in the AI era. His target: Nvidia’s increasingly lopsided customer base.
In a series of Substack posts published in late May, Burry laid out a case that Nvidia’s revenue structure has a vulnerability hiding in plain sight. The top three customers now account for 64% of the chipmaker’s accounts receivable, up from 56% just one quarter earlier. For context, that same figure sat at 33% back in 2020. In Burry’s own words, customer concentration is “off the charts.”
The numbers behind the warning #
The trajectory tells a stark story. Going from 33% concentration in 2020 to 64% in Q1 2026 means Nvidia’s dependency on its biggest buyers has nearly doubled in six years. That 8-percentage-point jump from Q4 2025 to Q1 2026 alone suggests the trend is accelerating, not stabilizing.
Burry zeroed in on Microsoft specifically. Microsoft’s revenue share declined for the first time in 13 quarters, even as its receivables climbed. Burry suggested this could indicate front-, where a customer stockpiles inventory or capacity ahead of potential changes, or it could signal collection challenges.
Burry ran the math on what happens if Microsoft decides to pull back. His estimate: a 20% cut in Microsoft’s Nvidia-related capital expenditures would translate to a 4.2% drop in Nvidia’s total revenue.
Why customer concentration matters now #
Burry has backed his thesis with more than words. Reports indicate he has taken put option positions against both Nvidia and Palantir, signaling that he’s willing to put capital behind his bearish outlook on certain corners of the AI trade. He warned of a potential “aggressive fall” in Nvidia’s stock price if AI demand proves to be shorter-lived than the market currently assumes.
What this means for investors #
The Microsoft dynamic is particularly worth watching. If the first revenue share decline in 13 quarters is a blip, then Burry’s concerns may prove premature. If it’s the beginning of a trend, where Microsoft optimizes its AI spending, renegotiates terms, or develops more in-house silicon, the impact on Nvidia could be disproportionate to the actual dollar change.
For portfolio construction purposes, the concentration data suggests that investors should be stress-testing their Nvidia positions against scenarios where one or two major customers reduce spending by even modest amounts. A 20% spending cut from one customer producing a 4.2% total revenue decline might sound manageable in isolation. But the market reaction to that kind of miss, at Nvidia’s current valuation, would likely be anything but modest. Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our