Michael Burry, the investor made famous by the film “The Big Short,” has placed a series of bearish bets against artificial intelligence stocks.
In late June, Burry revealed short positions on Applied Materials, Tesla, Caterpillar, and the iShares Semiconductor ETF. The Wall Street Journal cited his Substack newsletter, “Cassandra Unchained,” as the source.
The semiconductor ETF is a broad bet against the AI industry. Its top holdings include Advanced Micro Devices, Micron, and Nvidia. The fund has risen more than 130% over the past year.
Burry also disclosed a separate short position on Micron specifically. He cited the stock’s cyclical nature and what he called “historically extreme” rally levels.
Burry’s concern was partly triggered by news that South Korea’s Samsung and SK Hynix plan to invest $500 billion to build a chip hub. That announcement sent tech stocks higher. Burry responded on Substack, calling it “the beginning of the end.”
This is not his first move against AI. Last year, Burry opened bearish positions on Nvidia and Palantir Technologies, two of the biggest beneficiaries of AI spending.
On social media, Burry posted a series of charts drawing parallels between the current AI boom and previous speculative episodes.
One chart showed the global machine learning market growing from under $1 billion in 2011 to nearly $90 billion by 2025. He captioned it sarcastically, mocking investors who believe AI stocks can only go up.
A second chart tracked U.S. home prices before the 2008 housing crash. A third showed the rise of internet users during the 1990s before the dot-com collapse.
Burry did not call AI a bubble outright. He suggested that investors often take real long-term growth trends and push asset prices beyond what the fundamentals support.
Tech companies are expected to spend close to $700 billion on AI infrastructure in 2025 alone. Burry and others have questioned whether the revenue opportunity justifies that level of investment.
Not all AI stocks are struggling. Micron rose 300% in the first half of the year. Sandisk climbed more than 800% in the same period.
Burry was early when he bet against the housing market before 2008. He was correct in the end, but timing these calls is difficult even for experienced investors.
His short positions reflect his view that the current AI rally may be overextended, based on patterns he has seen before.
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