Michael Burry’s Nvidia (NVDA) Short Position: Are AI Stocks Headed for a Crash?

Key Takeaways

• Michael Burry dismissed criticism that his previous positions against Nvidia, Tesla, and housing were unsuccessful
• The investor has established short positions targeting Nvidia, Tesla, Micron, Applied Materials, and a semiconductor exchange-traded fund
• Burry described the AI investment surge as “mass addiction” and warned “The end is nigh”
• The Philadelphia Semiconductor Index plummeted 6.3% on July 1 followed by another 5.5% decline on July 2
• Bank of America’s Bubble Risk Indicator registered semiconductors at 0.91, approaching critical bubble levels

Michael Burry, renowned for correctly forecasting the 2008 financial crisis, is intensifying his stance that artificial intelligence stocks have become dangerously overpriced and face an imminent correction.

The hedge fund manager recently dismissed social media posts on X that suggested his various wagers against Nvidia, Tesla, and the mortgage-backed securities market had been unsuccessful. One X user labeled him “Captain Broken Clock.” Burry’s response was straightforward: “Nice graphic, but nothing on it is true.”

Fresh Bearish Positions Target Tech Giants

Burry revealed new short positions last week targeting Tesla, Nvidia, Micron, Applied Materials, Caterpillar, and the iShares Semiconductor ETF.

Micron Technology, Inc., MU

According to Burry, semiconductor stocks have climbed far beyond what the companies investing in AI infrastructure can reasonably justify. His analysis highlighted the Philadelphia Semiconductor Index trading near the upper boundary of its 15-year valuation band based on forward price-to-earnings ratios.

The investor posted “The end is nigh” on his social media account, later quoting the Joker from Tim Burton’s Batman film: “Dancing with the devil in the pale moonlight.” He characterized the AI investment frenzy as “mass addiction” and predicted the prevailing narrative “may die a death by a thousand cuts.”

His Micron short position was initiated on July 1 when shares traded at $1,051.87. The stock had surged nearly 700% over the previous twelve months and gained 241% in 2026 alone. Burry positioned this short as a contrarian play against crowd psychology, citing fear of missing out and what he termed “public commitment bias.”

The Philadelphia Semiconductor Index crashed 6.3% on July 1 and declined an additional 5.5% on July 2. During the same period, the S&P 500 slipped 0.22% while the Nasdaq retreated approximately 0.7%.

Examining the Artificial Intelligence Investment Boom

The magnitude of capital flowing into AI has been extraordinary. Nvidia reached a $5 trillion market capitalization in October 2025, representing a twelve-fold increase since ChatGPT’s debut in 2022.

Microsoft, Alphabet, Amazon, and Meta collectively held more than $10 trillion in market capitalization and represented 17% of the S&P 500 composition earlier this year.

These tech behemoths, including Oracle, secured $255 billion through debt and equity issuance in 2026 and are planning approximately $750 billion in AI data center investments by the end of this year.

The Magnificent Seven collectively shed over $2.2 trillion in market value during June 2026 alone.

Burry’s fundamental thesis centers on a circular reasoning pattern: semiconductor stocks appreciate because major technology companies continue AI infrastructure spending. Equipment manufacturers benefit as chipmakers expand production capacity. Investors then interpret each new capital expenditure announcement as validation that demand growth will persist indefinitely.

Bank of America’s Bubble Risk Indicator registered the semiconductor sector at 0.91. While this reading doesn’t confirm an inevitable collapse, it demonstrates the extreme nature of current valuations.

Burry maintains that market participants are likely overpaying prematurely, before concrete evidence emerges showing whether massive AI expenditures will generate meaningful financial returns.

The post Michael Burry’s Nvidia (NVDA) Short Position: Are AI Stocks Headed for a Crash? appeared first on Blockonomi.