The Big Short’s Michael Burry Delivers His Bluntest Warning Yet Regarding AI Stocks. Should You Listen?
2026-09-29 17:05
•Adria Cimino •The Motley Fool
•••• ••••• Axe Cap view
Is It Time to Worry About AI Stocks?
Michael Burry’s bearish bets on AI stocks could signal a near-term correction, but what does this mean for South African investors?
Michael Burry’s warning about an AI bubble popping isn’t something to dismiss outright. The famed investor’s move from shorting to buying puts on big AI-related names like Nvidia signals he expects a sharp dip soon. That includes semiconductors, where South African investors should pay attention because companies like MTN depend heavily on global tech trends. While we don’t have a pure local AI play on the JSE, a correction in US tech stocks typically lifts the rand temporarily – so watch USD/ZAR for clues. If the US tech sell-off materializes, it could squeeze growth-focused companies like Naspers and Prosus, who have large tech holdings overseas. Still, long-term AI growth remains intact, so any pullback could become a buy-the-dip opportunity. The risk is that AI fundamentals continue to surprise on the upside, leaving short-term sellers wrong-footed. this is just our opinion and not financial advice
Watch USD/ZAR closely and trim some exposure to growth stocks like Naspers and Prosus in the near term until the AI volatility settles. Consider adding later if valuations become more attractive.
- USD/ZAR
- Naspers
- Prosus
- AI technology outperforms expectations
- Global semiconductor supply stabilizes quickly
6/10
Michael Burry, famous for predicting the 2008 housing crash, has intensified his bearish stance on AI stocks, warning that 'the bubble in AI may burst sooner than later.' He has shifted from short positions to put options with shorter timeframes on several AI-related stocks and semiconductors, betting on a near-term decline. While acknowledging Burry's track record, the article suggests long-term investors should remain focused on AI's fundamental growth story and potential buying opportunities if a crash occurs.
Our take is based on reporting first published by The Motley Fool.