Michael Burry is sticking to his thesis, despite the markets having repeatedly tried to disprove him during this cycle. The legendary investor who anticipated the great subprime mortgage crisis has increased his bearish positions on Micron, Palantir, Nebius, and also the most important ETF tracking the performance of companies that sell chips. Burry is convinced of his thesis and evidently has no fear of going against the entire world.

Despite the mockery from around the world—and also from those whose performance is considerably worse than his—Michael Burry is not giving up. Perhaps, however, it is not only his well-known and increased short positions that are interesting, but also his long positions.

AI? All a bluff

Michael Burry has written extensively about the AI sector. For some time, he has been talking about a bubble fueled not only by unrealistic expectations regarding returns, but also by some cooked books that do not tell the whole truth about the actual balance sheets of the sector’s leading players.

Despite the sector’s incredible rally, and despite the fact that the June–July correction was more than fully recovered by subsequent gains, Burry is not backing down. The subprime-crisis genius announced in his newsletter that he had increased his short positions on several companies and ETFs in the sector. Above all, Palantir, now his nemesis, along with Nebius (neocloud), the SOXX ETF, which tracks the most important semiconductor index, and Micron.

There has also been movement on the long side, that is, in bullish positions. Burry publicly announced that he had increased his bets on QXO, Birkenstock, Build-A-Bear, Sprout, and MercadoLibre. These are also long-standing favorites of someone considered one of the greatest investors of all time, although he has a very particular strategy that not everyone seeking to emulate him has understood.

He can lose for a long time—but what if he is right…

The main mistake made when judging Michael Burry’s positions is to assess them by the same standard we apply to our own. In other words, by judging the minor—or even more significant—market movements that go against him.

Michael Burry’s style is clear: generally, options that could make him “the richest ever” if things unfold as he predicts. He can afford to be wrong for a long time—he pays premiums that are currently sustainable—and he can also close the wrong bets.

On the broader macro theme, however, he remains consistent: AI will burst like a bubble and drag down the companies he has bet against. Will he be right one day? Or will he continue paying premiums until that is no longer sustainable?