Michael Burry, the investor portrayed in “The Big Short,” is growing more aggressive in his bearish bet against the semiconductor and AI trade, citing signs of easing memory supply — including from China — as reason to push into shorts with “some size.”
In a Sept. 22 post on Substack, Burry said he added to short positions in Micron Technology (MU), the iShares Semiconductor ETF (SOXX), Nebius Group (NBIS) and Palantir Technologies (PLTR), while arguing that memory producers had run up to “ridiculous prices” and would “sell down intensely” when the cycle turns. He also recommended shorting equipment makers Applied Materials (AMAT) and Lam Research (LRCX).
Burry’s case rests on industry signals that the memory shortage narrative is cracking. He highlighted comments from Acer Chairman and CEO Jason Chen, who said certain advanced chips — including LPDDR5 and DDR5 9600 — remain in short supply, but that DDR4 has “more sellers than buyers.” Chen also pointed to expanding, lower-priced Chinese production as a threat to expectations of sustained price increases.
Burry said those remarks “align” with what he believes to be true.
The China piece moved into sharper focus this week after CXMT, China’s state-backed memory maker, announced that its fifth-generation memory chip platform had entered mass production. Burry flagged a separate report that CXMT had achieved DDR5 manufacturing yields above 90% as “huge if true.”
Burry said he expects money to initially, and possibly for longer, rotate out of semiconductor stocks. “The memory shortage and AI adoption narrative is sucking all the air out of the room,” he wrote. He noted a recent session in which major indexes climbed while value stocks declined, adding that “that trend is getting stronger.”
Still, Burry stopped short of calling an imminent market top. He described the Nasdaq 100 as “historically overvalued” and “historically top-heavy,” yet said new index highs make a short-term bearish call difficult. “Not necessarily before,” he replied when asked whether a rotation out of AI stocks into software would precede a crash, cautioning that bull traps can occur near tops but that there have been too few tops to make that a reliable timing guide.
Alongside the shorts, Burry said he had built full positions in QXO, Build-A-Bear Workshop (BBW), Sprouts Farmers Market (SFM), Birkenstock Holding (BIRK) and MercadoLibre (MELI), all of which he said had “corrected tremendously” and looked “rather attractive.”
The positioning cuts against Micron’s recent momentum. MU shares rose 5% to $1,096.16 on Tuesday, extending a winning streak to four sessions and leaving the stock up about 14% in September, on track for a second straight monthly gain.
Micron’s most recent results underscore the strength Burry is betting against: fiscal third-quarter revenue rose to $41.46 billion from $9.30 billion a year earlier, with an 84.6% gross margin. The company forecast roughly $50 billion in fourth-quarter revenue and is scheduled to report those results on Sept. 30.
The stakes for Burry’s thesis — and for the memory cycle — become clearer in a week.
