‘Sometimes, we see bubbles’: Why Michael Burry is betting against AI and doubling down on these stocks instead
‘Sometimes, we see bubbles’: Why Michael Burry is betting against AI and doubling down on these stocks instead
Rebecca HollandWed, May 6, 2026 at 10:10 AM UTC
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Michael Burry looks at the camera grimly.
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Michael Burry isn’t afraid to go against the herd.
The hedge fund manager famously bet against the U.S. housing market ahead of the 2008 crash — earning $100 million for himself and $725 million for his investors — a move later profiled in the hit movie The Big Short (1).
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Now, he’s raising alarms again.
In April, Burry doubled down on his prediction that the AI bubble is set to pop. CNBC reported that he had initiated a new position in Microsoft and increased holdings in MSCI, PayPal and Adobe (2).
“Software stocks sold off hard today on some earnings news from IBM and ServiceNow that investors took as indicative of an AI threat,” Burry said in a Substack post (3). “I did not sell any software stocks.”
Burry first put his followers on alert in 2025.
“Sometimes, we see bubbles,” Burry wrote on X in late 2025. “Sometimes, there is something to do about it. Sometimes, the only winning move is not to play (4)”.
In a 13F filing in early November 2025, Burry’s firm, Scion Asset Management, revealed bearish positions against two of the market’s hottest AI names (5). Scion disclosed put options on 1,0000,000 shares of Nvidia (NVDA) and 5,000,000 shares of Palantir (PLTR).
A put option gives the holder the right — but not the obligation — to sell a stock at a set strike price before expiration, a strategy typically used when an investor expects the stock’s price to decline.
In other words, through Scion, Burry bet against Nvidia and Palantir.
Why Burry is betting on a bubble burst
By way of explaining his choice, Burry reposted an interview with Nvidia CEO Jensen Huang on X in mid-April 2026, where the head of the company was put in the hot seat by podcaster Dwarkesh Patel (6).
“Dwarkesh nailed it,” Burry wrote. “Jensen squirmed and obfuscated. This was shocking to me. Every $NVDA bull needs to watch this with an unbiased eye.”
Nvidia has become the chipmaker of choice in the AI race — and a Wall Street idol. Its shares hit a new peak price of $216.61 as of late April (7), and have risen by over 73% in the last year alone (8).
While Scion’s filing doesn’t include the strike prices, expiration dates or premiums paid for those options contracts, the underlying shares tied to Scion’s put positions carried a combined notional value of nearly $1.1 billion.
Burry himself even leaned into the drama — pairing his “bubble” comments with a photo of Christian Bale portraying him in The Big Short.
Is Burry wrong to bet against AI?
Not everyone is impressed. Palantir CEO Alex Karp fired back on CNBC in November 2025.
“The two companies he’s shorting are the ones making all the money, which is super weird,” Karp said (9). “The idea that chips and ontology is what you want to short is bats— crazy.”
Other reports suggest that the bubble fears are a thing of the past. Writing in The Atlantic, Rogé Karma noted that while he previously believed a bubble was coming, bets on AI are starting to pay off, and AI companies are turning profitable (10).
“Software developers are adopting AI tools en masse and reporting astronomical productivity benefits.” Karma wrote. “The worry that the country is building too many data centers now coexists with the fear that we won’t have enough of them to satisfy the public’s growing appetite for these products.”
AI darling Anthropic is also emerging as a runaway success, with Karma citing an Axios report that the company’s revenue is increasing faster than Zoom’s during the pandemic, and even Standard Oil’s during the Gilded Age (11).
“If the company’s current growth rate were to continue, then by early next year it would be taking in more money than any other company in the world,” he wrote.
So is Burry “bats— crazy”, or once again poised to say “I told you so”? Here’s how to protect your portfolio either way.
Read More: This $1B private real estate fund is now accessible to non-millionaires. Start investing with just $10
A safe haven shines again
When storm clouds gather over the markets, gold often steps back into the spotlight.
Long seen as the ultimate safe haven, gold isn’t tied to any single country, currency or economy. It can’t be created at will by central banks like fiat money, and in times of economic turmoil, market turbulence or geopolitical uncertainty, investors tend to pile in — driving up its value.
In fact, gold’s stellar performance in 2025 shows just how much investors rely on the metal as a safeguard when the markets are rocky.
Burry himself made a big bet on gold in 2024, purchasing 440,729 shares of Sprott Physical Gold Trust at the end of the first quarter. The shares, valued at $7.6 million, were at the time the fifth-largest position in his portfolio (12).
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A time-tested income play
Like stocks, real estate has its cycles, but it doesn’t rely on a booming market to generate returns.
Even during a downturn, high-quality, essential real estate can continue to produce passive income through rent. In other words, you don’t have to wait for prices to rise to see a payoff — the asset itself can work for you.
In fact, investing legend Warren Buffett has occasionally pointed to real estate as a prime example of a productive, income-generating asset. In 2022, Buffett remarked that if you offered him “1% of all the apartment houses in the country” for $25 billion, he would “write you a check (13).”
Why? Because no matter what’s happening in the economy, people still need a place to live and apartments can consistently produce rent money.
Of course, you don’t need billions — or even to buy an entire property outright — to benefit from real estate investing.
You can tap into this market by investing in shares of vacation homes or rental properties through Arrived.
Backed by world-class investors, including Jeff Bezos, Arrived allows you to invest in shares of vacation and rental properties, earning a passive income stream without the extra work that comes with being a landlord of your own rental property.
To get started, simply browse through their selection of vetted properties, each picked for their potential appreciation and income generation. Once you choose a property, you can start investing with as little as $100, potentially earning quarterly dividends.
Short-term rentals aren’t the only way to tap into this market without a major property investment. You can also invest in the long-term rentals market, which can offer more stable returns.
Accredited investors can now tap into this opportunity through platforms such as Lightstone DIRECT, which gives accredited investors access to single-asset multifamily and industrial deals.
Lightstone DIRECT lets individual investors tap into the institutional approach of Lightstone, one of the largest privately held real estate investment firms in the U.S., with $12 billion in assets under management.
The platform eliminates middlemen and the extra layers of fees that can add up in traditional real estate investing, usually known as “fee stacking.” This streamlined approach provides more direct access to institutional-quality deals.
Over nearly four decades, Lightstone has delivered strong risk-adjusted performance — including a 27.6% historical net IRR and a 2.54x historical net equity multiple on realized investments since 2004.
Each opportunity requires a $100,000 minimum and undergoes a rigorous review by Lightstone’s principals, including founder David Lichtenstein.
Lightstone also invests at least 20% of its own capital in every deal — roughly four times the industry average. With skin in the game, the firm ensures its interests are directly aligned with those of its investors.
Getting a piece of the action
Whether Burry’s move resonates with you or you have your own market convictions, getting the right investment advice is no longer a matter of simply relying on a single advisor at your bank. You can get the benefit of advice from a team of former hedge fund analysts with Moby.
They offer expert research and recommendations to help you identify strong, long-term investments backed by In four years, and across almost 400 stock picks, their recommendations have beaten the S&P 500 by almost 12% on average. They also offer a 30-day money-back guarantee.
Moby’s team spends hundreds of hours sifting through financial news and data to provide you with stock and crypto reports delivered straight to you. Their research keeps you up-to-the-minute on market shifts, and can help you reduce the guesswork behind choosing stocks and ETFs.
Plus, their reports are easy to understand for beginners, so you can become a smarter investor in just five minutes.
— With files from Jing Pan
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Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Vanity Fair (1); CNBC (2), (9), (13); @michaeljburry (3), (4), (6); SEC (5); Nvidia Investor Relations (7); Trading Economics (8); The Atlantic (10); Axios (11); Investor Place (12)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Source: “AOL Money”
