Michael Burry Bets Against AI Rally

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•  29 Sep 2026
 

$MU Micron Technology faces increased downward pressure as Michael Burry accelerates his big short thesis against the artificial intelligence sector. The investor famous for predicting the subprime crisis has transitioned his short positions into put options on Micron Technology, Nebius, Palantir, and the SOXX semiconductor ETF to gain higher leverage over a shorter time horizon. By replacing equity shorts with call derivatives including June expiry puts on Micron Technology at a strike price of 500 dollars, Burry is signaling a potential major trend reversal by this summer. The catalyst stems from concerns over tight market volatility metrics like the VIX and structural fragility within artificial intelligence revenues, prompting a shift away from expectations of sustained multiple expansion.

The decision to buy put options caps maximum downside exposure while introducing a definitive expiration schedule for the bearish thesis on Micron Technology. Burry cites credit market research from Ares highlighting the vulnerability of unproven future artificial intelligence revenues backed by demanding legal agreements, alongside commentary from Acer chief executive Jason Chen regarding growing Chinese memory manufacturing capacity. While analysts recently issued target prices as high as 2,000 dollars for Micron Technology, increasing domestic production in China threatens to restore traditional cyclicality to memory chips and dismantle current shortage assumptions. These fundamental pressures directly challenge the ongoing institutional flows that have pushed equity indices toward record highs.

Timing remains the primary vulnerability for short sellers as Micron Technology trades near its peak level despite extended bearish warnings. Burry previously compared the current market environment to the final months of the 1999 to 2000 bubble before expanding his positions and ultimately rolling them into structured put options. With June expiries on Micron Technology and Nebius alongside September 2027 puts on Palantir and the SOXX ETF, the options structure creates a hard deadline for these positioning implications to materialize. The strategy relies on earnings momentum stalling across artificial intelligence infrastructure providers before option time decay eliminates the upfront capital invested in the trade.

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