Overview
- In a Tuesday Substack post, Michael Burry said the market may be near a major top and raised the possibility of a sharp, 1987-style sell-off.
- Burry says he has held and in some cases enlarged short positions on the iShares Semiconductor ETF and individual names including Nvidia, Micron, Applied Materials, Tesla and Palantir, and he added that most of those shorts are profitable while his Nvidia bet has not been.
- The iShares Semiconductor ETF (SOXX) fell about 21% from the level Burry reported shorting in late June, a move that would have made his SOXX short profitable over that period.
- Burry estimated volatility-targeting funds hold roughly $500 billion and warned that those strategies mechanically cut exposure when volatility rises, which can force rapid selling and amplify market losses.
- He criticized reports of very large, guarantee- or debt-backed AI financing arrangements tied to Nvidia and OpenAI and said those megadeals could concentrate risk, create overcapacity in data centers and leave investors exposed if sentiment shifts.