Investor Michael Burry, known for profiting from the 2008 housing market collapse, has recently intensified his bearish stance on artificial intelligence (AI) stocks. He is currently holding short positions in major tech companies including Nvidia, Micron, Palantir, and Tesla, alongside a short position in the iShares Semiconductor ETF. Burry suggests a potential stock market crash reminiscent of Black Monday in 1987, when the Dow Jones Industrial Average fell by 22.6%.
In a post on Substack, Burry noted that new highs in the S&P 500 could attract more investments but expressed concern over a possible major market top. While his warnings recall historical market crashes, experts suggest that mechanisms like circuit breakers implemented after 1987 significantly reduce the risk of a similar scenario occurring today. Furthermore, the ongoing strong infrastructure investments in AI reflect a robust market that may not align with Burry’s predictions.
Investors are advised to consider dollar-cost averaging into index ETFs, such as the Vanguard S&P 500 ETF and Invesco QQQ Trust, which have shown strong long-term performance despite market fluctuations. Historically, consistent investment in these ETFs has proven to be an effective wealth-building strategy.
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