Michael Burry Warns of 1987-Style Crash, Maintains AI Shorts
On Tuesday, Michael Burry, known for predicting the 2008 financial collapse, warned that the recent high of the S&P 500 could foreshadow a downturn similar to the 1987 crash. He shared his thoughts on Substack, stating, "I still think we might be close to a significant peak." That day, the S&P 500 rose by 1.9%, marking its highest close since June, while the Nasdaq gained 2.7%. Burry is betting against several companies, including Nvidia, iShares Semiconductor ETF, Micron, Caterpillar, Palantir, Tesla, and Applied Materials, and he criticized the AI investment trend, calling Palantir "wildly overvalued." The infamous crash on October 19, 1987, saw the Dow plummet 22.6% in just one day.
Key facts
- Michael Burry warned of a possible 1987-style crash in a Tuesday Substack post.
- He maintained short positions in Nvidia, iShares Semiconductor ETF, Micron, Caterpillar, Palantir, Tesla, and Applied Materials.
- The S&P 500 rose 1.9% to a record close on Tuesday, its first since June.
- Burry cited BTIG's Jonathan Krinsky: S&P 500 surged 5% in four days to a new high only three times before (March 2000, April 1999, November 2020).
- All Burry's shorts were profitable except Nvidia.
- Burry bought January 2027 puts on Nvidia with a $115 strike price at $3.30 per contract.
- Burry called Palantir 'wildly overvalued' with a fundamental value under $50 per share.
- Black Monday occurred on October 19, 1987, when the Dow fell 22.6%.
- Burry believes AI infrastructure funding structures could buckle.
- He said 'shorting is not for everyone' but 'I must short.'
Entities
Artists
- Michael Burry
Institutions
- Substack
- BTIG
- CNBC
- Benzinga
Sources
- Quartz —