Michael Burry's Bearish Bet Against Micron Amid AI Bubble Fears

Michael Burry, the American investor famously depicted in "The Big Short," has reportedly escalated his bearish wagers against the artificial intelligence (AI)-driven market rally. Burry disclosed in a Substack post that he opened a direct short position in memory-chip maker Micron Technology (MU) at $1,051.87 per share on July 1. This move is seen as part of Burry's broader thesis that the AI market is significantly overvalued.

Burry's bearish bet on Micron comes after the company's stock experienced an extraordinary surge, climbing 697% over the past year and 241% year-to-date in 2026. Following robust earnings reported on June 25, Micron's shares had soared to as high as $1,213. However, Burry contends that Micron's valuation has reached "historically extreme levels," fueled by AI excitement and investors' fear of missing out (FOMO) rather than fundamental strength.

The renowned investor pointed to Micron's long-term cyclical history, stating that the company has been a "destroyer of capital" in approximately one out of every three quarters and has experienced negative free cash flow nearly half the time. As a pure DRAM (Dynamic Random Access Memory) stock, Burry noted that Micron tends to be overhyped during boom cycles and severely impacted during downturns. He also indicated that he opted for a direct stock short rather than put options due to high option premiums.

This development has already put pressure on Micron's stock, which declined by approximately 15% over the two trading sessions preceding Burry's disclosure. His position against Micron is part of a wider pessimistic view on the semiconductor sector. He had previously disclosed short positions against other AI-related companies, including Nvidia (NVDA), Applied Materials (AMAT), Tesla (TSLA), Caterpillar (CAT), and the iShares Semiconductor ETF (SOXX).

Burry believes that the massive increase in global chip spending, such as South Korea's plan to invest over $500 billion in its semiconductor industry, signals that the sector may struggle to generate real returns and marks "the beginning of the end" for the semiconductor cycle. Comparing the current AI craze to the dot-com bubble, Burry suggests that too much capital is chasing too little proven profit.

Conversely, most Wall Street analysts disagree with Burry's assessment. Analysts maintain a "Strong Buy" consensus rating for MU stock, with average price targets implying a 60% upside potential from current levels. Market experts anticipate Micron will continue to benefit from robust AI demand and a prolonged memory upcycle.