Michael Burry Bets Against AI Boom with Long-Dated Put Options
Michael Burry, the investor famous for predicting the 2008 financial crisis in The Big Short, has shifted his strategy from shorting common stocks to buying put options on several AI-linked companies. Burry covered his short positions in Micron (MU), Nebius (NBIS), Caterpillar (CAT), iShares Semiconductor ETF (SOXX), CoreWeave (CRWV), Nvidia (NVDA), and Palantir (PLTR), replacing them with put options across various expirations and strike prices. The move was largely driven by new research that led him to believe the AI bubble may burst “sooner than later.”
Burry’s new put positions include June expirations for MU and NBIS, December 2027 puts for CAT, and September 2027 puts for NVDA, PLTR, and SOXX. He also initiated a new short position in MetLife (MET), using LEAP puts with strikes in the $70s. The repositioning was partly motivated by tax-loss harvesting, but Burry emphasized that his weekend research played a bigger role in accelerating his timeline for a potential AI market correction.
Burry explained that put options allow for greater leverage, making them a more attractive tool as he adjusts his investment strategy. He also rolled his QQQ put position into a larger Nasdaq 100 Index put position, with September 2027 strikes in the $24,000s. Meanwhile, retail sentiment on Stocktwits remained bullish for MU and PLTR, while NVDA saw neutral sentiment and low message volume.
The stocks in question have seen significant year-to-date gains, with MU up over 276%, NBIS rising 175%, NVDA increasing 22%, and PLTR gaining 0.34%. Burry’s shift to put options signals his growing conviction that the AI sector’s rapid growth may not be sustainable in the near term.