Michael Burry Sees Trouble Ahead for Micron, Takes Short Position on MU

Michael Burry, the investor made famous by The Big Short, has taken an interesting bet against one of the hottest names in the AI space.

Burry recently revealed that he has opened a short position on Micron stock. This comes even as the memory-chip maker saw record financial results and benefited from the AI demand. His move came as a surprise to many investors, considering the fact that the company has been one of the strongest performers in the semiconductor sector this year. 

Micron’s incredible run is a concern for Burry

In a Substack post, Burry said the MU stock rally was being driven by "fear of missing out.” He also called it the "greater fool theory." 

According to him, Micron is one of the most stretched stocks in the market, and that alone is enough reason to be bearish. He shared that he opened his short position at $1,051.87 per share. Burry chose to short the stock directly rather than buy put options because he felt the contracts were already too expensive.

Additionally, he noted that over the past 42 years, the stock has seen 34 declines of more than 30%. This makes it, in his words, one of the most cyclical companies in the semiconductor industry.

Burry also highlighted that the stock is currently trading above its 200-day moving average, as it has at any time since 1984, including during the dot-com boom. He hinted that this suggests investors may be pricing for a future that is way too optimistic.

Apart from Micron, he opened short positions against Nvidia, Applied Materials, and the iShares Semiconductor ETF. He argued that AI chip stocks could see a correction of about 30%.

Record results challenge the bear case

Micron recently reported the strongest quarter in its history. Fiscal third-quarter revenue reached $41.5 billion, up significantly from the same period a year earlier. Management also guided for $50 billion in revenue during the current quarter, which highlights the growing demand for memory products used in AI systems and data centers.

Chief Executive Officer Sanjay Mehrotra has repeatedly said that the demand for its products is still very strong across the industry.

The stock has surged more than 240% since the beginning of 2026. This pushed the firm’s market value above $1 trillion. Other analysts are still optimistic. Many Wall Street firms have buy ratings and an average price target above their current level.

Bulls behind Micron say that AI has changed the pace of the memory market. They said that the supply agreements and demand could stop the boom-and-bust cycles Burry pointed to.

Meanwhile, Burry warned that the hype around AI may be running ahead of fundamentals. He said that semiconductor stocks usually outperform other parts of the AI market and are now trading at expensive valuation levels.