Michael Burry, the investor made famous by his prescient bet against the housing market before the 2008 financial crisis, has expanded his bearish positions against Micron Technology (NASDAQ: MU) and Palantir Technologies (NASDAQ: PLTR).
The move signals that Burry believes the artificial intelligence chip market is heading into what he describes as a “down cycle,” with prices for AI chips set to fall sharply in the near term.
Burry has built a reputation for contrarian bets that run against prevailing market sentiment, and his latest moves place him squarely at odds with the broader bullish narrative surrounding AI-driven semiconductor demand.
Micron has been one of the most closely watched semiconductor stocks in recent years, riding the wave of surging demand for memory chips used in AI data centers and high-performance computing applications.
Palantir, the data analytics and AI software firm, has also seen its stock elevated by investor enthusiasm around artificial intelligence, making it a notable target for a bearish thesis tied to a chip market correction.
Burry’s short positions suggest he believes current valuations across the semiconductor and AI space are not supported by the underlying fundamentals, and that a pricing correction is imminent.
The iShares Semiconductor ETF (SOXX), which tracks a broad basket of chip stocks, was also down, reflecting broader pressure across the sector that aligns with the kind of market environment Burry appears to be positioning for.
A chip “down cycle” would typically involve falling average selling prices, inventory build-ups, and margin compression across companies that manufacture or depend heavily on semiconductor supply chains.
The AI investment boom has driven enormous capital flows into chip-adjacent companies, but some market observers have warned that supply growth may eventually outpace demand, leading to the kind of correction Burry is wagering on.
Burry’s track record lends weight to even his most unconventional positions, and his renewed bearish stance on Micron and Palantir is likely to draw significant attention from institutional and retail investors watching the AI trade closely.
Whether the anticipated down cycle materializes at the pace Burry expects remains to be seen, but his expanding short book makes clear he sees meaningful downside risk in the current AI chip pricing environment.
