Michael Burry, the star of The Big Short,

and the man who predicted the 2008 crisis two years before it happened,
has opened a short position on a new stock!

I'm sure it's the last stock that would come to your mind in the current AI economy!

It's ...
Micron stock.
At a price of $1,051.87 per share.

The striking number here is not the size of the trade,
but the deviation of the stock price from its 200-day moving average, which is the highest level since 1984.

Burry himself said this deviation didn't even occur at the peak of the dot-com bubble.
Micron's stock quadrupled in the first half of this year alone.

The only publicly listed manufacturer in America that directly sells DRAM memory,
has suddenly become the most attractive AI stock.
--
But Burry sees the story from a completely different angle.
He says Micron's return on invested capital averages no more than 4%, and its return on equity is only 7%.

Figures he described as "honestly terrible"
for a company that is now seen as a champion of the chip industry.

More dangerously, Burry believes that Micron is no longer the decision-maker in its own industry.
Its capital expenditure is now tied to South Korea's plans,
which have announced investments exceeding $500 billion in the chip sector.

This means Micron follows the market, not leads it.
Burry describes the stock's rise in just three words:
Fear of missing out, FOMO
and the greater fool theory,
and the commitment bias.

Meaning people are buying because everyone else is buying,
not because the numbers justify it.

This trade isn't isolated.
Burry has previously disclosed short positions on Nvidia, Tesla, Caterpillar, and Applied Materials,
in addition to the SOXX fund that tracks the entire semiconductor sector.

In contrast, he has doubled his long positions in
PayPal, Sprouts Farmers Market, Zoetis, Fannie Mae, and Freddie Mac.

The man who bet against the housing market before everyone else,
is now betting against the biggest investment narrative of this decade.

Are we looking at a man who sees what the market doesn't?
Or is the AI cycle different this time,
and the old bubble rules don't apply?

I'd love to hear your personal opinion on this
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