Michael Burry: "Semiconductor Stock Rally Reminiscent of Dot-Com Bubble Collapse"...Will He Be Right This Time?

Michael Burry Substack Post

Michael Burry, the American short-seller investor famous as the real-life character from the movie 'The Big Short,' commented on the 8th (local time) that the recent stock market rally driven by the artificial intelligence (AI) boom is reminiscent of the period just before the 2000 'dot-com bubble' collapse.

According to reports from the online newsletter platform Substack and US CNBC, Burry stated in a post that day, "It's constantly just AI. No one talked about any other topic all day," sharing his thoughts after listening to economic broadcasts during a long drive.

He pointed out, "The stock market is not fluctuating based on employment reports or consumer sentiment indicators. Stock prices are just rising because they have been rising so far."

He added, "People think they understand the two-letter topic (AI) well," and said, "It feels like we've reached the final months of the 1999-2000 bubble."

He also compared the recent sharp rise in the Philadelphia Semiconductor Index to the tech stock collapse of 2000.

This index, which covers major semiconductor chip companies such as Nvidia, Broadcom, Intel, Micron, and TSMC, has surged by about 40% in the past month.

In particular, the stock prices of traditional CPU and memory chip manufacturers such as Intel, AMD, and Micron saw significant increases.

Driven by the strength of these semiconductor chips, the US S&P 500 Index and the Nasdaq Index both hit new record highs on the 8th, despite instability in the Middle East.

Earlier, Paul Tudor Jones, founder of Tudor Investment and a titan in the US hedge fund industry, also predicted in an interview with CNBC the day before that the New York stock market's bull run, based on the AI boom, could continue for another 1-2 years. However, he warned that the current atmosphere of the New York stock market is similar to 1999, a year before the dot-com bubble peaked, and that stock prices could fall significantly when the bull market ends.

Burry amassed great wealth by accurately predicting the US subprime mortgage crisis in 2008 and betting on the decline in prices of related assets using short-selling techniques, and his story was made into the 2015 film 'The Big Short.'

He has consistently argued that the AI industry is in a severe bubble and that a collapse is imminent.

However, while Burry gained fame for his single exceptional prediction of the 2008 financial crisis, his subsequent pessimistic predictions have repeatedly been wrong, leading to a cautious atmosphere on Wall Street regarding his statements.

In 2021, when Burry criticized Tesla's stock price as a bubble, Elon Musk, CEO of Tesla, mocked Burry as a "broken clock."