Michael Burry Bets Against AI Rally: New Bearish Positions on Nvidia, QQQ, and Semiconductor Stocks

Michael Burry, the investor best known for predicting the 2008 housing crash, has taken a strongly bearish stance on major technology and semiconductor stocks, warning that valuations across the AI-driven market appear stretched after a prolonged rally.

According to recent disclosures, Burry has built sizable downside positions using long-dated put options expiring in 2027. These include bearish bets against the semiconductor sector via the SOXX, broader tech exposure through the QQQ, and individual names such as Nvidia. He also added short exposure to Palantir, citing concerns about valuation and business fundamentals.

Burry reportedly purchased put options on SOXX with a strike around $330, QQQ at $525, and Nvidia at $125, all expiring in 2027. He has described the current market environment as a “stretched” phase of a long-running tech expansion, suggesting that risk-reward conditions are increasingly unfavorable.

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Warning on Semiconductor and AI Valuations

Burry has been particularly vocal about semiconductor stocks, arguing that the sector’s rapid rise may not be supported by long-term earnings growth. The semiconductor ETF SOXX recently experienced a powerful rally, gaining over 40% in a single month, driven by strong momentum in AI-related chip demand.

However, Burry believes this surge may represent excessive optimism rather than sustainable fundamentals, pointing to what he sees as overheated valuation metrics across the AI supply chain.

Nvidia and AI Bubble Concerns

A major focus of his bearish thesis is Nvidia, which has become the central beneficiary of AI infrastructure demand. Burry argues that market expectations for Nvidia may be too aggressive, forecasting:

Margin compression over time
Slowing growth as AI infrastructure matures
A potential normalization of demand after the initial AI buildout cycle

He has positioned his Nvidia puts as a “cheaper way” to short the broader AI data center trade, reflecting his belief that sentiment—not fundamentals—is driving much of the current rally.

Broader Market Short Exposure

Beyond semiconductors, Burry has also taken bearish positions on:

QQQ (broad tech index exposure)
Palantir (AI software sector)

He stated that combined bearish positions now account for a meaningful portion of his portfolio, signaling a conviction-level view rather than a short-term trade.

Mixed Reaction from AI Leaders

Despite Burry’s concerns, companies like Palantir have continued to report strong growth. The company recently posted revenue growth of 85% year-over-year, significantly exceeding expectations, and raised its forward guidance. However, the stock still experienced volatility following the announcement, reflecting uncertainty around AI valuations.

Market Outlook: Momentum vs Valuation Risk

Burry’s stance highlights a growing debate in markets:

Bulls argue AI demand justifies high valuations
Bears argue expectations are becoming disconnected from reality

The semiconductor sector’s explosive rally has reinforced optimism, but also increased scrutiny from investors concerned about cyclicality and overvaluation.

Conclusion

While Burry’s positions are long-dated and reflect a multi-year view rather than immediate downside expectations, they signal growing caution among some veteran investors about the sustainability of the AI-driven market rally.

For now, the market remains driven by momentum—but the debate over valuation versus growth is clearly intensifying.

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Screener Links — Palantir (PLTR) & Related AI / Data Analytics Ecosystem

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