Michael Burry Increases Short Positions on Micron, Palantir, and Semiconductor ETF as Nasdaq-100 Hits Record

Investor Michael Burry is expanding his bets against the semiconductor sector, citing a coming memory chip glut driven by rising Chinese production capacity, even as the Nasdaq-100 index climbed to an all-time high of 30,732 on Tuesday.

Burry, who gained prominence for anticipating the housing market collapse ahead of the 2007–2009 global financial crisis, outlined his positions in a Substack post published Tuesday. He said the structural shortage of memory chips that has underpinned large gains in technology stocks during the current AI infrastructure buildout is temporary.

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

He is increasing short positions on memory chip manufacturer Micron Technology, cloud platform Nebius Group, the iShares SOXX semiconductor ETF, and data analytics and software provider Palantir.

"I will watch however, and look to cover should the market take these up to new highs again," Burry added. "I continue to hold my puts."

Burry anchored his thesis to a Taiwanese media report in which Jason Chen, CEO of electronics manufacturer Acer, observed that Chinese memory chip production capacity has been rising consistently. "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," Chen was quoted as saying.

The concern echoes analysis from U.S. economists. Sujai Shivakumar at the Center for Strategic and International Studies in Washington published a paper warning of a potential memory market surplus from expanded Chinese output. "Chinese overcapacity could become the next memory-market risk," Shivakumar wrote. "Expanding Chinese DRAM and NAND production may ease some near-term pressure, but it could also produce future surplus, dumping, trade friction, and deeper dependence on Chinese suppliers for commoditized but strategically important memory devices."

Boise, Idaho-based Micron sits at particular exposure in that scenario, given the company has been increasing capital spending and building new domestic plants. According to FactSet data, Micron's forward free cash flow stands at $130 billion, up from $26 billion in May, $10 billion in February, and $4.7 billion in November of last year — reflecting the soaring profit margins and pricing power the company has enjoyed during the chip shortage cycle.

Burry also characterized the broader Nasdaq-100 as "historically overvalued and historically top heavy" in his Wednesday post. The index has risen five of the last six sessions, reinforcing the all-time high close. Some technical analysts have noted signs of internal weakness beneath the headline number, however.

"The NDX is ~flat since mid-August, but the percent of names above their 200 [day moving average] has gone from 77% to 56%," Jonathan Krinsky at BTIG wrote in a client report last week. "The good news is this means stock selection has a higher importance … The bad news is this means the overall AI trade is not as robust."

Alongside his short positions, Burry said he is also adding to several long positions he finds attractively priced after recent pullbacks, including QXO, Build-A-Bear, Sprouts, Birkenstock, and MercadoLibre. "All have corrected tremendously, and I find the prices offered by the market rather attractive. All these positions are full positions for me now," he wrote.

Whether the memory cycle turns on Burry's timeline will depend heavily on the pace at which Chinese chipmakers bring additional DRAM and NAND capacity online — a factor that U.S. trade policy and export controls could still influence in either direction.

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