Michael Burry Shorts Micron, Calls AI Chip Rally Overheated

Investor Michael Burry opened a short position in Micron Technology at $1,051.87 on July 1 and disclosed the trade on his Substack as part of a portfolio repositioning. The position reflects his bearish view on the recent rally in memory chip stocks tied to artificial intelligence demand.

Burry wrote that he sees “fear of missing out, greater fool theory, [and] public commitment bias” behind Micron’s recent surge. He pointed to the company’s cyclical history, noting 34 drawdowns of more than 30% over the past 42 years and that shares are trading further above their 200-day moving average than at any time since 1984. He also cited Micron’s historical profit measures, giving a median return on invested capital of 4% and a median return on equity of 7%, and wrote that “one quarter in every three, Micron is a destroyer of capital.”

Burry said he chose a short rather than options because puts appeared expensive at current levels and indicated he may buy puts later if the stock settles and volatility drops. The short joins previously disclosed bearish positions in several AI-related chip names and an industry ETF.

Market moves in 2026 provide context for the trade. Micron has risen more than 240% since the start of the year but slipped about 10% over the past month after reaching an intraday high of $1,255 following its June 25 earnings report. The stock fell roughly 11% on one day and about 5% the next as losses spread across memory peers, including a sharp drop in SanDisk.

Several developments have been cited for the recent pullback. Industry reports have linked the decline to plans by a major cloud customer to reduce excess capacity and to another large tech company seeking additional memory supply from China. Burry also referenced planned investments by Samsung Electronics and SK Hynix exceeding $500 billion to build semiconductor capacity, calling the announced spending a proximate cause of the earlier rally.

Ipek Ozkardeskaya, a senior analyst at Swissquote, noted pressure on customer margins and said China accounts for about 15% of Apple’s sales, suggesting other companies could seek alternative suppliers or push back on higher memory prices.

Memory markets are known for swings in prices and demand tied to the broader technology cycle and data-center spending. Large capacity additions by major manufacturers can quickly change supply dynamics and affect margins.

Summing up his actions, 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.”