Michael Burry Bets Against AI Stocks, Echoing Warnings of Past Market Bubbles

Table of Contents

Key Takeaways

Michael Burry has initiated short positions against multiple AI-related stocks, including Applied Materials, Tesla, Caterpillar, and a major semiconductor ETF
The investor described Samsung and SK Hynix’s massive $500 billion chip manufacturing facility proposal as signaling “the beginning of the end”
Burry has also taken a bearish position on Micron stock due to its cyclical patterns and rally reaching “historically extreme” heights
Through historical chart analysis, Burry draws connections between today’s AI frenzy and previous bubbles including the dot-com era and the 2008 mortgage crisis
Major technology companies are projected to invest approximately $700 billion in AI-related infrastructure throughout this year

Michael Burry, the legendary investor whose prescient housing market bet was immortalized in “The Big Short,” has taken significant bearish positions targeting artificial intelligence-related equities.

Toward the end of June, Burry made public his short stakes in Applied Materials, Tesla, Caterpillar, and the iShares Semiconductor ETF. According to the Wall Street Journal, these positions were announced through his Substack publication titled “Cassandra Unchained.”

TSLA Stock Card
Tesla, Inc., TSLA

The semiconductor exchange-traded fund represents a comprehensive wager against the artificial intelligence sector. Among its largest components are Advanced Micro Devices, Micron, and Nvidia. This fund has surged over 130% during the previous twelve months.

Burry has additionally revealed a focused short position targeting Micron individually. His rationale centered on the company’s historically cyclical business patterns and rally valuations he characterized as “historically extreme.”

Part of Burry’s apprehension stemmed from reports that South Korean semiconductor giants Samsung and SK Hynix intend to commit $500 billion toward constructing an extensive chip manufacturing complex. When this news broke, technology stocks rallied. Burry’s reaction on Substack labeled the development “the beginning of the end.”

This represents a continuation of his skepticism toward AI investments. During the previous year, Burry established bearish positions against Nvidia and Palantir Technologies, both major recipients of artificial intelligence capital expenditure.

Burry’s Historical Comparisons Between AI and Previous Speculative Manias

Through social media channels, Burry shared multiple charts illustrating similarities between today’s AI enthusiasm and earlier speculative market episodes.

One visualization depicted the worldwide machine learning market expanding from below $1 billion in 2011 to approaching $90 billion by 2025. His accompanying caption used sarcasm to critique investors convinced AI equities can only appreciate.

Another chart traced U.S. residential real estate values preceding the 2008 financial collapse. A third documented internet user growth throughout the 1990s before the technology bubble burst.

Burry stopped short of explicitly declaring AI a bubble. Instead, he implied that market participants frequently take genuine long-term technological advances and inflate asset valuations beyond what underlying economics can support.

Technology corporations are anticipated to allocate nearly $700 billion toward AI infrastructure during 2025 alone. Burry and other skeptics have raised questions about whether potential revenue generation warrants such extraordinary capital deployment.

Not every AI-related equity has disappointed investors. Micron appreciated 300% during the year’s first half. Sandisk experienced gains exceeding 800% over the identical timeframe.

Burry positioned himself early when he wagered against the housing sector before 2008. While ultimately vindicated, accurately timing such contrarian predictions remains challenging even for sophisticated investors.

His current short positions demonstrate his belief that the ongoing AI rally may have extended beyond sustainable levels, reflecting patterns he has identified in previous market cycles.

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