Michael Burry shorts Micron stock, warns AI chip rally has gone too far

Investor Michael Burry, best known for his successful bet against the US housing market portrayed in The Big Short, has reportedly opened a short position in Micron Technology MU, arguing that the memory chip maker's recent rally has been driven by speculative enthusiasm rather than fundamentals.

According to a post published on his Substack, Burry shorted Micron shares at $1,051.87 on July 1 while simultaneously adding to five existing long positions.

The move comes as Micron remains one of the best-performing semiconductor stocks of 2026 despite a recent pullback.

Micron shares have gained more than 240% since the start of the year, although the stock has declined around 10% over the past month after reaching a high of $1,255 following its June 25 earnings report.

Burry questions Micron's valuation and cyclical history

In his Substack post, Burry argued that Micron's rally reflects investor psychology rather than long-term business fundamentals.

Burry said he shorted the stock because of “fear of missing out, greater fool theory, [and] public commitment bias.”

He also highlighted the company's long history of volatility.

“Micron defines cyclical like no other,” Burry wrote, noting that the company has experienced 34 drawdowns of more than 30% over the past 42 years.

He added that Micron shares are now trading further above their 200-day moving average than at any time since 1984, “not even during the dot-com peak.”

Burry also criticized the company's historical profitability, stating that Micron's median return on invested capital of 4% and median return on equity of 7% are “frankly terrible.”

He further argued that “one quarter in every three, Micron is a destroyer of capital,” pointing to decades of uneven returns and periods of negative free cash flow.

Although options could have provided another way to express a bearish view, Burry said, “the puts seemed expensive,” adding that he “will look to add puts should the stock settle down and bring volatility down.”

Bearish view extends across semiconductor sector

The Micron position forms part of Burry's broader negative outlook on artificial intelligence-related semiconductor stocks.

Earlier this week, he disclosed short positions in Nvidia, Applied Materials and the iShares Semiconductor ETF (SOXX), saying AI-related chip stocks could face a 30% correction.

In a separate June 30 Substack post, Burry expressed concern over plans by Samsung Electronics and SK Hynix to invest more than $500 billion in a new semiconductor hub.

“The proximate cause of today’s rally is big spending announced out of Korea,” Burry wrote. “Well, I see that as the beginning of the end.”

Market sentiment toward memory stocks has also weakened more broadly.

Micron shares fell 5% on Thursday after falling nearly 11% on Wednesday alongside sharp losses in SanDisk.

Some market participants linked the decline to reports that Meta is considering selling excess cloud capacity, while another report indicated that Apple is seeking additional memory supply from China.

Commenting on the industry, Swissquote senior analyst Ipek Ozkardeskaya said, “China makes up around 15% of Apple’s sales and other companies could follow these steps as they also see their profits being squeezed by an unreasonable jump in memory chip prices.”

Burry adds to long positions

While increasing his bearish exposure to semiconductors, Burry also disclosed that he added to several existing investments.

According to his Substack post, he increased holdings in PayPal, Sprouts Farmers Market, Zoetis, Fannie Mae and Freddie Mac.

Summarizing his latest positioning, Burry wrote: “Yesterday I shorted one stock even though it was down a good amount because I think I have a pretty good idea how this resolves. I also added to five positions. This time may be different, but not nearly different enough.”