Michael Burry Thinks the AI Bubble Will Burst Sooner Than Later, Including Big Drops in Micron and Nebius by Mid-2027
2026-10-04 12:17
•Adam Levy •The Motley Fool
••••• •• Axe Cap view
Beware the AI Bubble Burst: What It Means for SA Investors
Michael Burry’s bet against the AI boom could reverberate through global tech and the rand.
Michael Burry, known for calling the 2008 crash, is now warning that the AI frenzy will deflate sooner than many expect. He’s placing big bets against Micron and Nebius, both reliant on booming but potentially overstretched demand for AI-driven data centers and memory chips. If his call is right, it means the companies powering AI could face a sharp drop in profits as capital spending slows. While these names aren't listed on the JSE, the impact shows up locally as the rand—USD/ZAR—could strengthen if risk appetite fades and foreign inflows retreat from SA equities. Banks and industrials tied to tech investments might lose momentum. Look at Naspers and Prosus: their heavy exposure to global tech means this AI correction could hit their share prices. Still, if AI spending stays robust, Burry’s bearish view may be off. For now, caution around these global tech proxies is warranted. this is just our opinion and not financial advice
Trim exposure to Naspers and Prosus to reduce risk from a potential AI pullback. Watch USD/ZAR closely for signs of a shift in foreign investment sentiment.
- Naspers
- Prosus
- USD/ZAR
- AI demand remains strong, supporting tech earnings
- Rand depreciates on local factors unrelated to tech
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Michael Burry, famous for predicting the 2008 housing crisis, believes the AI bubble will burst sooner than expected. He has repositioned his portfolio with put options on Micron and Nebius expiring in June 2027, betting on stock price drops exceeding 50%. Burry argues that AI revenue may not support the industry's capital expenditures, and a slowdown in spending could hit memory chip makers and data center operators first.
Our take is based on reporting first published by The Motley Fool.