Post by Augustine Chiagozie (@pabloexchange)

📉 Michael Burry is betting against the AI boom

Michael Burry, best known for predicting the 2008 financial crisis, has reportedly taken short positions against Nvidia, Tesla, Caterpillar, and the Philadelphia Semiconductor Index, betting on a 30-40% market decline by March 2027.

His argument is that the companies funding the AI buildout, including Microsoft, Amazon, Google, and Meta, have significantly underperformed the chipmakers supplying them. In his view, AI infrastructure spending is benefiting suppliers more than the companies paying for it.
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Burry also points to stretched valuations. The Philadelphia Semiconductor Index is trading about 65% above its 200-day moving average, a level last seen during the dot-com bubble. Semiconductor stocks now trade at roughly 30x forward earnings, near the top of their 15-year valuation range.
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He also argues that AI pricing power is weakening and claims hyperscalers are understating depreciation costs, which could eventually weigh on future earnings.
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Burry's conclusion is clear: he believes the AI trade has become the biggest bubble in the market.

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