Is Michael Burry Right About Nvidia and the AI Bubble? The Data Is Getting Harder to Ignore

TLDR

• Michael Burry rejected claims that his past bets against Nvidia, Tesla, and the housing market were wrong
• He has built bearish positions against Nvidia, Tesla, Micron, Applied Materials, and a semiconductor ETF
• Burry posted “The end is nigh” and called the AI narrative “mass addiction”
• The Philadelphia Semiconductor Index dropped 6.3% on July 1 and 5.5% on July 2
• BofA’s Bubble Risk Indicator placed semiconductors at 0.91, near bubble territory

Michael Burry, the investor famous for predicting the 2008 housing crash, is pushing harder on his warning that AI stocks are overvalued and headed for trouble.

Burry recently rejected posts on X claiming his bets against Nvidia, Tesla, and the housing market had all failed. An X user called him “Captain Broken Clock.” Burry replied simply: “Nice graphic, but nothing on it is true.”

Burry Expands His Bearish Bets

Last week, Burry disclosed new short positions against Tesla, Nvidia, Micron, Applied Materials, Caterpillar, and the iShares Semiconductor ETF.

Micron Technology, Inc., MU

He says chip stocks have raced well ahead of the companies actually paying for AI infrastructure. His charts showed the Philadelphia Semiconductor Index near the top of its 15-year valuation range on forward price-to-earnings.

Burry posted “The end is nigh” on social media, then quoted the Joker from Tim Burton’s Batman: “Dancing with the devil in the pale moonlight.” He called the AI boom “mass addiction” and said the narrative “may die a death by a thousand cuts.”

His Micron short was disclosed on July 1, at a price of $1,051.87. The stock had risen nearly 700% over the prior year and 241% in 2026. Burry framed the short as a bet against herd mentality, blaming fear of missing out and what he called “public commitment bias.”

The Philadelphia Semiconductor Index fell 6.3% on July 1 and another 5.5% on July 2. The S&P 500 dropped 0.22% and the Nasdaq fell around 0.7% on those same days.

The Numbers Behind the AI Trade

The scale of the AI trade is large. Nvidia hit $5 trillion in market value in October 2025, up 12-fold since ChatGPT launched in 2022.

Microsoft, Alphabet, Amazon, and Meta together carried over $10 trillion in market value and made up 17% of the S&P 500 earlier this year.

Those same companies, along with Oracle, raised $255 billion through debt and equity in 2026 and plan roughly $750 billion in AI data center spending by year-end.

The Magnificent Seven lost over $2.2 trillion in market value in June 2026 alone.

Burry’s core argument is that chip stocks are going up because big tech keeps spending on AI. Equipment makers rise because chipmakers are building capacity. Then investors treat every new spending announcement as proof the demand will keep growing.

BofA’s Bubble Risk Indicator placed the semiconductor sector at 0.91. That does not guarantee a crash, but it shows how stretched valuations have become.

Burry’s position remains that investors may be paying too much, too early, before it is clear whether AI spending will deliver real returns.

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