Michael Burry Warns of 1987-Style Crash as Nvidia Short Loses Money
Michael Burry, who rose to prominence by betting against U.S. subprime mortgages before the 2008 financial crisis and founded Scion Asset Management, has challenged the durability of the AI boom. He argues that demand for data centers and chips is being amplified by financing arrangements that may not last. His comparison with Black Monday — when the Dow Jones Industrial Average plunged 22.6% on Oct. 19, 1987 — matters because AI-linked companies have become major drivers of U.S. equity gains.
In an Aug. 4, 2026 Substack post, Burry said the market may be near a major top and vulnerable to a “1987-type” fall. The S&P 500 nevertheless gained 1.9% that day to its first record close since June, while the Nasdaq Composite rose 2.7%. Burry said all his disclosed bearish positions remained profitable except Nvidia, which he shorted at $198.09 a share. He is also short the iShares Semiconductor ETF, Micron, Caterpillar, Palantir, Tesla and Applied Materials, and said he would cut losses if trades moved decisively against him.
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The history behind this event‘The Big Short’ Investor Michael Burry Shorts Micron, Sticks to AI Bubble Thesis
Michael Burry, the contrarian investor portrayed in “The Big Short,” has long been known for betting against prevailing market trends. His latest target is memory-chip giant Micron, extending his argument that AI stocks are overvalued and will ultimately form a bubble. The move has also focused market attention on whether semiconductor industry conditions and share prices have become detached from fundamentals.
As of July 20, 2026, event data showed that Burry had established a short position in Micron, citing the stock’s excessive divergence from its moving average and weak fundamentals. He had previously shorted Nvidia and Applied Materials. However, the available data did not disclose when the position was opened, the number of shares sold short or its value, leaving the scale of his actual exposure unclear.
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