'Big Short' Michael Burry bets short on AI and semiconductors... What stocks did he buy instead?

'Big Short' Michael Burry expands short bets on AI and semiconductors... and instead bought consumer and retail stocks

▲ Michael Burry, the protagonist of 'The Big Short' who predicted the 2008 financial crisis / ChatGPT generated image ©

Michael Burry, the 'Big Short' investor who predicted the 2008 U.S. housing market collapse, has expanded his short positions in artificial intelligence (AI) and semiconductor-related stocks while increasing his holdings in consumer, retail, and industrial stocks. This strategy involves distancing himself from the AI craze that has driven stock market gains over the past two years and allocating funds to stocks he deems to have relatively attractive valuations.

According to crypto media outlet Finbold on September 23 (local time), Burry disclosed recent changes to his investment portfolio via his Cassandra Unchained Substack newsletter on the 22nd. He stated that he has added short positions in Micron Technology, Nebius Group, iShares Semiconductor ETF, and Palantir Technologies, and has expanded positions in several recently invested stocks to their target sizes.

Burry's expansion of short positions aligns with his ongoing caution regarding the AI-driven stock market rally. He believes that the strong demand for advanced memory semiconductors used in AI applications has created a perception of prolonged supply shortages. However, he judged that as production capacity expands, particularly among Chinese manufacturers, supply constraints could ease, putting downward pressure on memory semiconductor prices. He explained that concerns that the high valuations of some semiconductor sectors might be unsustainable if market expectations cool down are reflected in his short positions.

Conversely, he expanded long positions in consumer, retail, and industrial companies. The newly increased holdings include building materials distributor QXO, Build-A-Bear Workshop, Sprouts Farmers Market, Birkenstock, and MercadoLibre. Burry assessed that the market is currently offering these stocks at attractive prices, and these investments have also reached their target overall position size in his portfolio.

Each stock spans different industries. QXO operates in building materials distribution, while Build-A-Bear and Sprouts provide exposure to consumer spending. Birkenstock is a global footwear brand, and MercadoLibre is a major player in the Latin American e-commerce and digital payments market. In essence, he has increased bearish bets on AI and semiconductor-related stocks while building long positions in consumer, retail, and industrial companies that he believes are relatively undervalued.

This portfolio adjustment reflects Burry's value investing strategy, which seeks investment opportunities in the discrepancy between market price and intrinsic value. The core of this move is his active increase in buy positions in the consumer, retail, and industrial sectors, while expanding short positions in semiconductor and technology stocks, contrary to the market's AI optimism. Specifically, his concern that technology stock valuations have recently become elevated is reflected in this portfolio restructuring.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*