Hedge fund investor Michael Burry has disclosed short positions on major semiconductor stocks, including Nvidia, warning that the collapse of the artificial intelligence (AI) market bubble is imminent. Notably, he interpreted the large-scale semiconductor investment plans recently announced by Samsung Electronics and SK hynix as a signal that the AI rally has peaked.
According to CNBC on June 30, Burry said in a Substack post to investors that he had shorted Nvidia, Applied Materials, Tesla, the iShares Semiconductor ETF, and Caterpillar.
He pointed to the large-scale investment plans by Korean memory chipmakers announced on June 29 as a sign that the AI investment cycle has peaked. "The direct trigger for today's rally is the large-scale investment plan announced in Korea," Burry said. "But I see this as the 'beginning of the end.' Now it's only a matter of time."
The comment targeted the surge in semiconductor equipment stocks on the New York exchange after Samsung Electronics and SK hynix announced they would build four new semiconductor plants worth 800 trillion won in the southwestern region, including Gwangju. That day, the Philadelphia Semiconductor Index (SOX) jumped 3.92% on the New York exchange. AMD rose 6.86%, Intel 7.23%, Applied Materials 6.00%, and KLA 5.29%.
Burry said he shorted Caterpillar for the first time, one of the representative beneficiaries of the AI investment boom. Caterpillar, the world's largest maker of construction and mining heavy machinery, is considered a leading infrastructure beneficiary of the AI data center construction boom. "Caterpillar is a stock that delivered good returns as a long position in the past, but this time it was the first to catch my eye," he said, diagnosing that its share price is excessively overvalued. Burry analyzed that Caterpillar's price-to-sales ratio (PSR) was at its highest level in about 30 years.
