Key Points

Michael Burry revealed short positions against Nvidia Tesla and Micron in a pair of Substack updates this week.
Micron fiscal third quarter revenue more than quadrupled from a year earlier reaching 41.5 billion dollars.
Tesla delivered 480126 vehicles in the second quarter yet its shares trade above 350 times earnings.
10 stocks we like better than Micron Technology

Michael Burry spent this week setting entry prices on a wager against the artificial intelligence trade. In a June 30 Substack post the hedge fund manager known from The Big Short disclosed short positions in Nvidia Tesla Applied Materials Caterpillar and the iShares Semiconductor ETF. Two days later he added a short against Micron Technology reportedly entered near 1052 dollars per share.

Burry is the investor who wagered against the housing market before the 2008 crash. When he targets three of the market most popular stocks at once the question arises naturally: Should you be concerned?

The answer begins with examining his case carefully.

Image source: Getty Images.

The argument Burry presents

Burry case is not that these companies are collapsing. It is that their share prices have reached historical extremes. Micron he noted now trades further above its 200 day moving average than at any time since 1984 a period that covers the dot com peak.

History supports much of his view. Micron has been public for four decades and by his count its shares have endured 34 drops exceeding 30 percent. In his opinion the AI surge has not ended the memory cycle. It has only caused investors to overlook that cycle.

The remainder of the short positions apply similar reasoning across the AI chain: Applied Materials provides tools for advanced chips Caterpillar supplies equipment for data center expansion and the semiconductor ETF bundles the sector into one holding.

A well known name and striking chart do not prove a thesis. Investors have warned of an AI bubble for over two years while these stocks continued rising. The better question is how much each of the three stocks relies on the optimism Burry challenges.

Three stocks three distinct situations

Micron offers the most compelling case because the stock does not appear costly on current figures. In its fiscal third quarter ended May 28 2026 the memory producer revenue more than quadrupled year over year to 41.5 billion dollars and climbed roughly 74 percent from the prior quarter. Management projected about 50 billion dollars in revenue for fiscal fourth quarter.

At around 976 dollars per share Micron trades near 22 times earnings. That appears reasonable. Yet memory peaks often look that way as multiples shrink when profits surge and the debate centers on whether such earnings can persist. Burry bets they cannot. Micron response is that its new long term customer contracts make demand steadier than in earlier cycles.

Nvidia may be the oddest entry on the list because its valuation seems simplest to support. Revenue in the chipmaker fiscal first quarter ended April 26 2026 rose 85 percent year over year to 81.6 billion dollars with data center revenue up 92 percent. Yet the stock trades near 30 times earnings. If the AI trade is a bubble its biggest player carries a valuation resembling something calmer.

Tesla represents the reverse situation. The electric vehicle maker delivered 480126 vehicles in the second quarter up about 25 percent year over year and the stock still dropped roughly 7.5 percent on the news. Market attention has shifted from volume to profit per vehicle. Tesla first quarter operating margin stood at just 4.2 percent and with earnings per share of 1.10 over the past 12 months the stock trades above 350 times earnings. Burry needs no cycle argument here. He only needs Tesla robotaxi and software profits to arrive later than the valuation implies.

So should you be concerned?

Not about the announcement itself. A short seller disclosing positions alters nothing about these companies. And Burry has been early on major calls before. Even his well known housing wager took years to succeed.

Yet his test applies more pressure to some of these stocks than others. Nvidia results provide the strongest reply since 85 percent growth at 30 times earnings offers a buffer the other two lack.

The remaining stocks prove tougher to justify. Micron requires investors to accept that memory pricing can remain at levels the sector has historically found hard to maintain across a full cycle. And Tesla requires them to accept more than 350 times earnings while the profitable version of the business stays largely in the future.

Overall I would not sell a stock solely because Michael Burry is shorting it. But his positions serve as a helpful reminder to review portfolio allocations. If a memory slump or delayed robotaxi timeline would harm holdings that exposure deserves attention now while the debate continues rather than after it concludes.

Should you purchase shares in Micron Technology at present?

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Daniel Sparks has clients with positions in Tesla. The Motley Fool has positions in and recommends Applied Materials Caterpillar Micron Technology Nvidia Tesla and iShares Trust iShares Semiconductor ETF. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq Inc.