Michael Burry has reiterated his short positions against Nvidia and other AI-related stocks, warning of a possible 1987-style market decline. This week, he dismissed AI leaders' calls to slow AI development as cover for slowing growth. Nvidia shares still edged higher even as the broader market pulled back.
In an early-August Substack post, Michael Burry reiterated his short positions in Nvidia, Palantir, Micron Technology, and the iShares Semiconductor ETF, reviving a bet against AI stocks he first disclosed a year earlier. In the same post, he said the rally could end in a possible decline similar to the 1987 market crash.
Burry's track record keeps investors watching
Investors track Burry's moves closely because he made $700 million for his clients by betting against the U.S. housing market in the early 2000s, a call later dramatized in the film "The Big Short." He is known for going against the crowd, and his AI short bet is the latest example.
AI slowdown calls draw a sharp response
This week, Burry addressed calls from Anthropic and other AI leaders to slow AI model development for safety. According to a post on X, Burry called the move a "cover for real uncontrollable slowing growth."
Nvidia gains despite the bearish call
Even so, Nvidia traded at $212.17, up 0.6%, while the S&P 500 slipped 0.4% and the Nasdaq fell 0.8%. The stock is heading for an annual gain, though it slid in the first quarter of the year as the broader AI trade cooled from its earlier pace.
AI names have driven the market's bull run over the past three years, helped by optimism about AI's business potential and interest rate cuts. This year, however, concerns over heavy AI infrastructure spending, rising inflation, and turmoil in Iran have periodically interrupted the momentum. Valuation has also drawn scrutiny: the S&P 500's Shiller CAPE ratio reached a level surpassed only once before, during the dot-com bubble.
Burry's bet against Nvidia now stands against a stock still climbing in spite of it.
Source: The Motley Fool
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