Michael Burry has added to his short position in Micron Technology, Nebius, Palantir and the iShares Semiconductor ETF, arguing that a temporary chip supply shortage is inflating prices. The Scion Asset Management founder expects a "down cycle" once production capacity catches up.
Michael Burry expanded his bearish bets against the semiconductor sector on Tuesday, adding to short positions in Micron Technology, Nebius, Palantir and the iShares Semiconductor ETF, according to an update on his Substack, Cassandra Unchained. Burry is the founder of hedge fund Scion Asset Management and is best known for anticipating the subprime mortgage crisis that led to the 2008 financial crisis.
Burry ties high prices to a supply bottleneck, not demand
Burry has held short positions on semiconductor stocks since the end of last year, betting that current prices are inflated because of a supply bottleneck rather than a structural surge in demand. He argues that memory-chip makers diverted production capacity from what he calls "normal chips" toward high-bandwidth chips used for AI, creating a temporary shortage of conventional DRAM chips used in personal computers, smartphones and other consumer electronics. That shortage drove up prices, benefiting chipmakers for now.
But Burry expects the shortage to fade. According to his Substack: "this shortage will blow off as production catches up", and memory will have a down cycle again over the next two years. He said he continues to hold puts on Micron, Nebius, Palantir and the SOXX ETF to hedge should the stocks keep gaining.
Micron and Nebius have posted steep gains despite pullbacks
Micron and Nebius have both hit all-time highs this year, though they have since corrected as much as 41% and 51% from those peaks, according to MarketSurge data. Even so, both remain on strong rallies: Micron is up almost 280% year-to-date, and Nebius has climbed more than 175%. The iShares Semiconductor ETF, which holds Micron stock, is up 85% this year, while Palantir has had a middling 2026, up only 6%.
Outside the chip sector, Burry also added shares in several consumer names he said had corrected tremendously and were trading at rather attractive levels: Build-A-Bear Workshop, Sprouts Farmers Market, QXO, Birkenstock and MercadoLibre.
Source: Investor's Business Daily
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