<\/p>\n
Michael Burry made his name betting against the housing market before the 2008 crash. Now, “The Big Short\u201d investor is turning that same skepticism toward artificial intelligence, and Micron Technology just landed on his watchlist.\u00a0<\/p>\n
On July 1, Burry disclosed he shorted Micron (MU) shares at $1,051.87, according to a Substack post.\u00a0<\/p>\n
Valued at a market cap of $1.3 trillion, Micron stock has returned nearly 1,000% over the last three years. Moreover, it is up 260% in 2026, making it among the top-performing stocks globally.\u00a0<\/p>\n
Burry says Micron’s rally has gone too far<\/p>\n
In the Substack post, Burry noted, “Micron defines cyclical like no other,” pointing out the stock has suffered 34 drawdowns of more than 30% over the past 42 years.\u00a0<\/p>\n
Burry stated: <\/p>\n
“Yesterday I shorted one stock even though it was down a good amount because I think I have a pretty good idea how this resolves.”<\/p>\n
He also said Micron shares are trading further above their 200-day moving average than at any point since 1984, a stretch that includes the dot-com bubble.<\/p>\n
He was even harsher on the company’s underlying profitability. Burry pegged Micron’s median return on invested capital at just 4% and median return on equity at 7%, calling both figures “frankly terrible.”\u00a0<\/p>\n
Related: Michael Burry makes first-ever bet against longtime favorite stock<\/p>\n
Burry added that Micron destroys capital roughly one quarter out of every three, a pattern he tied to decades of inconsistent free cash flow.<\/p>\n
He framed the recent surge as driven by emotion rather than fundamentals, citing “fear of missing out, greater fool theory, public commitment bias” as the real forces behind the trade.\u00a0<\/p>\n
The stock market expert also downplayed Micron’s high-bandwidth memory business, the AI-linked chips fueling much of the excitement, saying it is “just another in a very long series” of products rather than a permanent edge.<\/p>\n
According to an Invezz report, Burry now holds short positions in Nvidia (NVDA), Applied Materials (AMAT), and the iShares Semiconductor ETF (SOXX), and has said AI-related chip names could see a 30% correction.<\/p>\n
Michael Burry warns that Micron is an extremely cyclical stock<\/p>\n
Astrid Stawiarz/Getty Images<\/p>\n
What Micron’s own numbers show<\/p>\n
Burry’s history lesson checks out on the cyclical part. But Micron’s most recent quarterly results tell a very different story about where the company sits right now.<\/p>\n
For the quarter ending May 2026, Micron posted $41.5 billion in total revenue, up 345.7% year over year.\u00a0Gross margin rose to 84.6%, compared with just 37.7% a year earlier.\u00a0Operating margin jumped to 80.4% from 23.3%.\u00a0Net income for the quarter came in at $28.2 billion, against $1.9 billion in the same period last year.Micron generated $25.4 billion in cash from operating activities and $17.6 billion in free cash flow for the quarter, a sharp turnaround from the $4.6 billion and $1.7 billion posted a year earlier.\u00a0The balance sheet also strengthened, with cash and equivalents rising to $26 billion and long-term debt falling to $5.1 billion from $15 billion.<\/p>\n
None of this disproves Burry’s broader thesis about historical volatility. Micron has truly been an inconsistent earner over four decades, and the memory business is famous for boom-and-bust cycles.\u00a0<\/p>\n
More Manager Buy\/Sells:Nancy Pelosi places big bets on two surging tech stocksMichael Burry pulls back on massive Palantir short betWarren Buffett\u2019s Berkshire triples stake in newspaper giant<\/p>\n
But the current quarter is not showing the “capital destroyer” pattern Burry described. It is showing record profitability, driven largely by AI demand for high-bandwidth memory chips and new long-term supply contracts with major customers.<\/p>\n
On Micron’s fiscal third quarter earnings call on June 24, Chief Business Officer Sumit Sadana said customer demand for memory chips remains “well above our ability to supply,” across nearly every product category through 2028.\u00a0<\/p>\n
CFO Mark Murphy added that free cash flow has grown to levels not seen in most of the company’s history.<\/p>\n
The bet comes down to timing, not fundamentals<\/p>\n
Burry is arguing that the stock price has run too far, too fast, and that history suggests a pullback is coming.\u00a0<\/p>\n
Given Micron’s track record of sharp reversals, that is not an unreasonable position.<\/p>\n
But the financial data from Micron’s latest quarter shows a company currently generating unprecedented cash flow and margins, not one showing early cracks.\u00a0<\/p>\n
Whether Burry’s timing proves right will likely depend on how long the current memory shortage and the AI spending will last.<\/p>\n
Related: Micron just dethroned Nvidia in one key way<\/p>\n
#Michael #Burry #doubles #chip #bubble #Micron #short<\/p>\n","protected":false},"excerpt":{"rendered":"
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