Michael Burry bets against these 4 AI stocks, one of which rallied 190% YTD. Will his AI bubble warnings come true?

Popular American investor and 'Big Short' fame Michael Burry has been warning about an AI bubble since the beginning of the year, ramping up his bets against several AI bellwethers because he believes that the market is nearing a big crash as the AI bubble fizzles out.

Recently, Burry said that the market is currently in a 'denial' mood, a phase that could last six to nine months, as seen during the previous 2000 and 2008 crises. Michael Burry cited recent research from Ares Management that said it would take only a season in which AI revenue disappoints the massive capital expenditure that hyperscalers are putting behind it.

“In that scenario, a handful of boards, predisposed to redeploy capital toward the highest-conviction bet, would simply need to conclude that the highest-conviction bet has shifted,” the report said.


This comes after Burry said in August that the AI crash could begin from 2028. However, his latest comments imply that he expects this to happen sooner. Here are 4 key artificial intelligence stocks he is betting against.

Also read | Michael Burry screams big market crash ahead! Why legendary investor Peter Lynch ignored such predictions

Nvidia

Michael Burry first disclosed his put contracts against Nvidia in the first quarter of 2025. He has two arguments. First, he says the chips are not being depreciated properly, and their usable lifespan will be shorter than anticipated. His second concern is around financing. Nvidia has many mutually beneficial relationships with other companies, like its agreement with CoreWeave, in which it has a large stake and which is buying Nvidia's chips.

Nvidia had refuted the analysis. In a seven-page response to “questions and claims we’ve received,” it began by citing “Michael Burry on Twitter / X” as its first collection of source documents the company sought to refute. However, Burry was not satisfied. “I stand by my analysis. I am not claiming Nvidia is Enron. It is clearly Cisco,” he said.

Nvidia shares have gained 18% in 2026 so far and 23% in the past one year. The stock has overall jumped 877% in the past five years.

Palantir

Michael Burry first bought Palantir puts in the third quarter of 2025. Unlike his position against Nvidia, the ‘Big Short’ investor doesn't seem to have a problem with Palantir's business. He simply thinks it is "wildly overvalued" and that its fundamental value is less than $50 per share, Motley Fool reported.

Palantir shares have gained over 20% in 2026 so far and more than 32% in the past six months. The stock has overall delivered multibagger returns of around 726% in five years.

Also read | AI bubble to burst sooner than expected? Michael Burry believes it would take only one season of revenue disappointment

Tesla

Burry’s position against Tesla dates back even before the excessive frenzy around artificial intelligence began. He took a short position against Tesla in 2021, calling it "ridiculously overvalued" last November as he continued to ramp up his bets against Musk’s company.

Tesla shares have fallen around 12% in 2026 so far, but rose over 27% in five years.

Micron

Burry announced puts on Micron in July this year. The Big Short investor is concerned about the memory cycle and said, "Over the next two years, this shortage will blow off as production catches up, and memory will have a down cycle again,” he said.

Yet, Micron shares continue to surge sharply. The stock has skyrocketed 190% in 2026 so far, and 87% in just six months. It has delivered a massive 1,253% return over the past five years, although it fell 17% in one month.

Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.