Investor Michael Burry has adjusted his strategy regarding artificial intelligence stocks, shifting from direct short positions to put options. Burry stated that he is accelerating his timeline for a potential AI bubble burst, suggesting a market reversal could occur before next summer.
The investor replaced his short position in Micron with put options expiring in June with a strike price in the $500 range. Similarly, his short position in Nebius was converted to put options expiring in June with a double-digit strike price. He also rolled his SOXX iShares semiconductor ETF short position into put options expiring in September 2027 with a strike price slightly above $400.
Burry also increased his bearish stance on Palantir by replacing existing positions with larger put options expiring in September 2027, with a strike price slightly above $100. He noted that these moves are partially intended to reduce tax liabilities, but primarily reflect his belief that the AI bubble will collapse sooner than previously anticipated.
His outlook is supported by research from Ares Management, which highlights risks associated with unproven AI revenues and capital expenditure expectations. The report suggests that if AI revenue fails to meet expectations within a single quarter, boards may reallocate capital, a scenario already anticipated in legal documentation.
