Michael Burry says the S&P 500 rally could still end in a 1987-style crash
The investor remains bearish as markets hit records and says he is still short semiconductors, Nvidia, Tesla and other stocks.
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- Michael Burry warned that the S&P 500’s record run could still reverse sharply in a 1987-style sell-off.
- He said he remains short several AI- and semiconductor-linked stocks despite the market rally.
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Michael Burry is known for his bearish calls and for profiting from the 2008 housing collapse. In this post, he argues that the current market advance may be building toward a major top while the S&P 500 is making new highs.
Michael Burry said he is keeping his bearish bets in place even as the S&P 500 climbs to record highs, warning that the market could still face a sharp sell-off similar to the 1987 stock-market crash.
"I continue to believe it is possible we are near a major top, and possible a 1987-type fall, but the S&P 500 making new highs likely will bring new money into the market," Burry said in a Tuesday Substack post.
The S&P 500 rose 1.9% Tuesday to its first record close since June, supported by stronger-than-expected corporate earnings and a drop in oil prices as hopes grew that the Strait of Hormuz would reopen to maritime traffic. The tech-heavy Nasdaq Composite gained 2.7%, pushing its rise over the first two days of the week to nearly 5%.
Burry has been one of Wall Street’s most outspoken skeptics of the artificial intelligence boom, arguing that demand for AI infrastructure is being driven by financing arrangements that may not be sustainable. He said the market’s advance is creating a self-reinforcing cycle, with lower volatility encouraging systematic investors to increase exposure.
"Remember, the market going up on falling volatility forces vol-targeting funds to leverage up, and brings leverage from other momentum strategies into play," he wrote.
Despite the rally, Burry said he continues to hold short positions in the iShares Semiconductor ETF (SOXX), Micron, Nvidia, Caterpillar, Palantir, Tesla and Applied Materials.
He said he remains confident in his long-term view of those positions, though he would cut his losses if the trades moved decisively against him. He said all of the positions remain profitable except for his bet against Nvidia.
"Again, shorting is not for everyone," Burry wrote. "I must short. Most should not."
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توقعات الذكاء الاصطناعي — احتمالات وليست حقائق
Burry will likely continue publicly defending his bearish view if the rally extends.
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Markets may react with renewed debate about AI valuations and semiconductor leadership.
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If prices move against him, Burry may cut some positions as he said he would.
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أسئلة مفتوحة
- How large are Burry’s short positions in each stock?
- How much of the rally is being driven by AI-related buying versus broader market strength?
- Will Burry add to or reduce his bearish bets if the rally continues?
