Wall Street is focused on buying Micron stock (NASDAQ: MU), as the semiconductor giant is delivering unprecedented returns. On the heels of the buying hysteria, Big Short investor and former hedge-fund manager Michael Burry has gone the opposite direction by taking a direct ‘short’ position in Micron stock. He revealed that he is shorting MU in his Substack post, which has taken investors by surprise.
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Why is Michael Burry ‘Shorting’ Micron Stock (MU) When Wall Street is Buying It?
Michael Burry wrote in his Substack post that Micron stock is in an “AI bubble territory” that will burst soon. The millionaire revealed that he took a short position in MU at $1,051.87 per share. He revealed that Micron’s options were too pricey, so he avoided puts for now. The former hedge fund manager explained that the semiconductor giant will be a clear example of the boom‑and‑bust cycle in chips.
“Yesterday I shorted one stock (Micron) 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,” Michael Burry wrote. He also called Micron’s ROIC and ROE “terrible,” saying that the company destroys capital one out of every three quarters.
Michael Burry pointed out the huge global chip investments, including South Korea’s $500 billion semiconductor plan. This influx of investment signals that the chip industry may soon experience a struggle to earn real returns. He added that too much money is chasing too little proven profit. This is the complete opposite of what other Wall Street analysts think about Micron stock’s prospects.
Apart from Micron stock, Michael Burry has taken short positions on several other AI giants. They include Nvidia, Tesla, Caterpillar, Applied Materials, and iShares Semiconductor ETF. He is the most skeptical about the growth of the AI industry that he has ever been. The millionaire operates in his own distinctive way, which retail traders cannot think about.