Unhappy with Wall Street’s love for AI stocks, Michael Burry links it to big spending announced out of Korea; says: I see that as the beginning of the end because …
America’s biggest investor, Michael Burry who is known for predicting the 2008 housing crash and expanded his bearish wagers against the AI stock rally. According to a report by the Wall Street Journal, Burry’s latest positions include shorts on Tesla, Caterpillar, Applied Materials, and an ETF tracking semiconductor makers (SOXX). The bets are structured to pay off if enthusiasm around artificial intelligence cools, continuing a months-long strategy targeting what Burry sees as unsustainable hype.
Korea’s $500 billion chip hub sparks alarm
As per the WSJ report, Burry linked his latest moves to announcements made by Samsung and SK Hynix, which recently unveiled their plans to invest more than $500 billion in a new chip hub. The news sent semiconductor stocks higher, but Burry warned it could mark a turning point. “The proximate cause of today’s rally is big spending announced out of Korea. Well, I see that as the beginning of the end,” he wrote in a Substack post.
ETF and corporate shorts
One of Burry’s updated bets uses put options against the SOXX ETF, which tracks chipmakers including Micron Technology and AMD. The position pays off if the index drops by about a third from its peak by March. He also added shorts against Caterpillar, noting its role in building data centers and chip facilities, and reiterated his bearish stance on Tesla, setting a price target of $416.22.Burry has also extended his short on Nvidia, which he previously accused of using circular financing deals to support customers, and on Palantir, which he argued is overly reliant on government contracts.
Michael Burry recently invested in this Chinese company
Recently, Burry revealed that he has increased his position in Alibaba Group (BABA). According to a report by Stockwits, in a Substack post, Burry said he purchased additional shares at $111.90, describing the Chinese tech giant as “the most advanced company in China as far as AI strategy goes.” Burry’s bullish stance on Alibaba comes as his fund has taken positions against U.S. AI leaders like Nvidia and Palantir. He has repeatedly warned that valuations in the American AI sector are inflated by hype rather than sustainable fundamentals, contrasting them with what he sees as undervalued opportunities in China.Burry highlighted, Alibaba’s ongoing stock repurchase program as a key factor in his investment thesis, arguing that buybacks are boosting shareholder value even though the market has yet to fully recognise it. He added: “The stock is well-off recent highs. When the time comes, the stock will launch fast and fly high.” Alibaba has committed $56 billion over three years to expand its AI footprint, including cloud computing, semiconductors, and model deployment. While its Cloud Intelligence Group posted strong growth in Q1, adjusted earnings per ADS fell 95% year-on-year, reflecting the heavy investment burden.
