If you’re waiting for Michael Burry to tell you when the AI bubble will burst, don’t hold your breath.
In Burry’s new post on his Substack, the famous “Big Short” investor said that “there is no way to time or predict.” the bubble bursts, especially when it still has room to grow.
“Short sales are almost always short-term transactions. Usually less than a year, maybe a few years at most,” Burry wrote. “Not 5 years, not 10 years.”
“I believe that today the stock market is in a phase that could become an upward blow of extreme magnitude, when at any time, perhaps even today or tomorrow, a generational high will be reached,” Burry added.
In the lengthy blog post, Burry answered readers’ questions about his previous posts. He argued that there is “supply-side gluttony,” meaning massive data center builds, GPU orders and multibillion-dollar commitments without real end-user demand, which investors confuse with supply chain activity. He attributed much of this hype to marketing from Nvidia CEO Jensen Huang.
“Even when he finally gets to the top, it won’t be for any specific reason,” Burry said later in the post. “Even if the reason is the bursting of an AI development bubble, this will probably not be apparent until a year or two later.”
“Most of the time, it’s not prudent to short stocks or buy puts. Stocks that are obviously overvalued tend to have the most bullish momentum, but they have very expensive puts,” Burry added.
Nvidia did not immediately respond to a request for comment on Burry’s latest excavations.
In November, Burry launched a paid substack called Cassandra unleashed. After posting charts on X showing the circulatory investment deals between Nvidia and other tech giants, his first post was aimed at Nvidia. He referred to the chipmaking giant as “Cisco” in the AI bubble debate, referring to the Internet networking giant whose shares plunged more than 75% during the Internet crash.
Nvidia issued a note to Wall Street analysts in late November pushing back on some of Burry’s claims.
Earlier in November, during Nvidia’s third-quarter earnings conference call, the CEO discussed his concerns about the AI bubble.
“From our perspective, we see something very different,” Huang told investors: “We excel in every phase of AI, from pre-training and post-training to inference. »
