Michael Burry expands bearish bets on memory chips as Nasdaq-100 reaches record high

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Burry expands memory chip bets

Highlights

Michael Burry increases short positions on Micron Technology, Nebius Group, SOXX ETF, and Palantir, citing rising Chinese memory chip supply and sector's boom-bust risks.
Acer CEO Jason Chen confirms Chinese memory production capacity is rising, with contract prices fluctuating and no ongoing shortage, raising concerns over potential oversupply and trade friction.
Micron Technology sees forward free cash flow jump to $130 billion, but faces pressure from expanding Chinese supply and increased capital spending amid Nasdaq-100's record high close at 30,732.

Bearish case centers on memory supply outlook

As reported by CNBC, Burry says in Substack posts this week that he is adding to short positions tied to memory chips and high-valuation technology names, arguing that the sector is likely to revert to its traditional boom-and-bust pattern. He says the current shortage should fade over the next two years as production catches up, and he is increasing bearish bets on Micron Technology, Nebius Group, the iShares Semiconductor ETF SOXX and Palantir.

Burry supports that view with a Taiwanese media report quoting Acer Chief Executive Jason Chen, who says Chinese memory chip production capacity is continuing to rise. Chen says there is no continuous shortage issue, adding that contract prices are fluctuating at elevated levels, with some prices moving up and others down.

Similar concerns are also emerging in U.S. policy and research circles. Sujai Shivakumar of the Center for Strategic and International Studies writes in a paper published Thursday that expanding Chinese DRAM and NAND output may ease near-term pressure but also risks creating future surplus, dumping, trade friction and deeper dependence on Chinese suppliers for strategically important memory products.

Implications for Micron and the wider AI trade

Additional Chinese supply could pressure Boise, Idaho-based Micron, which is increasing capital spending and building several new plants in its home state. The company is benefiting from strong margins and pricing power, and FactSet data cited in the report show forward free cash flow at $130 billion, up from $26 billion in May, $10 billion in February and $4.7 billion in November last year.

Burry also describes the Nasdaq-100 as historically overvalued and heavily concentrated after the index rises nearly 1% Tuesday to a record close of 30,732. The benchmark advances for the fifth day in six, although some Wall Street analysts are pointing to weakening breadth within the AI trade.

BTIG chief market technician Jonathan Krinsky writes in a client note last week that the Nasdaq-100 is roughly flat since mid-August while the share of stocks above their 200-day moving average falls from 77% to 56%. Burry says he is simultaneously increasing long positions in QXO, Build-A-Bear, Sprouts, Birkenstock and Mercado-Libre, arguing that recent corrections make those stocks more attractive.

In our earlier coverage of copper’s pullback from record highs, we explained why the broader backdrop still points to structural support for the metal despite short-term volatility. We noted that mine supply is constrained by declining ore grades, long development cycles and geopolitical risks, while electrification, EVs and the rapid buildout of AI data centers continue to add to end-use demand.

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