Michael Burry is all-in on these stocks that have ‘corrected tremendously’ — while doubling down on his AI shorts as Nasdaq hits high

In addition to betting against chips with positions against Micron and the iShares Semiconductor ETF (SOXX), Burry increased his shorts on cloud computing company Nebius Group and the enterprise AI software provider Palantir.

A major part of Burry’s bearish thesis is that there will soon be “a chip glut again” as the semiconductor industry falls back into its traditional boom-to-bust cyclicality.

As Burry wrote, “Over the next two years this shortage will blow off as production catches up, and memory will have a down cycle again.”

To support his case, Burry shared an interview with the Taiwanese electronics maker Acer’s CEO Jason Chen. When asked whether he noticed memory shortages, Chen responded, “No way,” adding, “How could there be a continuous shortage? China’s production capacity has been consistently increasing, and there is absolutely no shortage issue. Contract prices are currently fluctuating at a high level, with some prices going up and others down, causing a bit of confusion.”

Burry looks in the bargain bin

Although Burry gets a lot of press for his bearish views, he’s not betting against the market entirely. In fact, Burry has been buying beaten-down companies outside the AI sector hand over fist.​

In Burry’s Substack, he highlighted five stocks he’s now bought as “full positions” in his portfolio: The roofing distributor QXO, the grocery store Sprouts Farmers Market, the custom stuffed animal store Build-A-Bear, the footwear brand Birkenstock and the eCommerce site Mercado-Libre.

While these stocks are in very different industries, they share one trait Burry really likes: they’re trading at deep discounts. Burry wrote that he believes all of these stocks “have corrected tremendously” and now offer extremely “attractive” share prices.

Year-to-date, all the stocks Burry is buying have fallen double digits, with some like Build-a-Bear down as much as 57%.

Burry isn’t the only AI skeptic​

Looking at recent charts of AI-related stocks like Micron or SanDisk, it’s clear Burry is in the contrarian camp.

However, there are other prominent investors who don’t think this party will last much longer.