Michael Burry shifts AI short bets to put options as bearish timeline moves closer

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Burry shifts AI short bets

Highlights

Michael Burry shifted his AI short positions to put options expiring as soon as June, seeking greater leverage and a shorter bearish timeline.
Burry referenced research from Ares Management warning of risks from unproven AI revenue streams and noted that disappointing growth could rapidly reallocate capital.
Burry cited comments from Acer CEO Jason Chen about renewed cyclical pressure in memory chips due to rising Chinese capacity, adding to his bearish semiconductor outlook.

Options strategy points to nearer-term AI risk

As reported by CNBC, Burry said in his Monday investment newsletter that he is moving up the timeline for his bearish thesis and wants more leverage in his short positions, making put options a more attractive tool because of their lower cost and shorter time horizon.

He said some portfolio changes are meant to reduce tax liability, but that most of the shift reflects his view that the AI bubble may burst sooner rather than later. Burry replaced his short position in Micron with puts expiring in June in the $500 strike range, switched his Nebius short into June puts in the double-digit strike-price range, and replaced his short in the iShares Semiconductor ETF SOXX with September 2027 puts in the low $400s.

Burry also referenced research from Ares Management warning about the risks of AI investment models that depend on revenue streams that are not yet proven. He highlighted the possibility that even one period of disappointing AI revenue relative to the capital spending behind it could prompt boards to redirect capital away from what had been their highest-conviction bets.

Market context and semiconductor outlook

Burry's latest trades add to a broader bearish stance he has maintained this year, despite continued gains in the stock market. Earlier this month, he had already increased his short positions against Micron, Nebius and the SOXX semiconductor fund.

He also pointed to comments from Acer CEO Jason Chen, who told a Taiwanese media outlet that cyclical pressure is due to return to the memory chip sector as Chinese production capacity increases. That view adds a sector-specific concern to Burry's wider caution on AI-linked valuations.

Burry said equities are feeling like the final months of the 1999-2000 bubble. His warning comes as the Nasdaq Composite closes at a record last week, underscoring the gap between persistent investor enthusiasm for AI and a growing case from some market skeptics that the trade is becoming vulnerable.

Our earlier coverage on Micron’s earnings setup highlighted how options markets were pricing in a sharp post-results move, reflecting how central the stock has become to the AI infrastructure trade. We noted that while Micron looked inexpensive on forward multiples, that view depended on unusually strong gross margins that have historically preceded supply gluts and later margin compression. The piece also outlined a range-bound options strategy, framing Micron’s report as a broader test of how durable AI-linked chip demand really is.

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