Michael Burry Picks Chip Suppliers Over Micron — But Warns Memory Producers Could Sell Off 'Intensely'

• On Tuesday, he said he added “in some size” to shorts in Micron, SOXX, Nebius and Palantir.
• Burry highlighted Acer’s warning that DDR4 has more sellers than buyers and that expanding Chinese supply could pressure memory prices.
• Burry expects money to rotate out of semiconductor stocks but said new index highs make it difficult to call an imminent market top.

“The Big Short” investor Michael Burry says memory producers have risen to “ridiculous prices” and could sell off intensely when the cycle turns, boosting his case against Micron Technology (MU), while he watches for investors to rotate out of semiconductor stocks.

MU stock rose 5% to $1,096.16 on Tuesday, extending its winning streak to 4 sessions. Shares are up 14% so far in September and on track for a second straight monthly gain. 

Burry’s Chip Trade: Short Micron, Watch Chinese Supply

Burry told Substack subscribers that he favored companies supplying the chip industry over memory producers. “They really ran up to ridiculous prices for what they are and will sell down intensely on the other side,” he said of the producers. However, he also advised shorting equipment makers Applied Materials (AMAT) and Lam Research (LRCX).

On Tuesday, Burry said he added to shorts in Micron, the iShares Semiconductor ETF (SOXX), Nebius (NBIS) and Palantir Technologies (PLTR) “in some size.” 

In his latest trading post, Burry highlighted comments from Acer chairman and CEO Jason Chen, who said certain advanced memory products remained scarce, while DDR4 had more sellers than buyers. Chen also pointed to expanding, lower-priced Chinese production as a challenge to expectations of sustained price increases. Burry said that the remarks preceded a rebound in memory stocks, making them difficult to interpret, but added that they aligned with his view.

Burry called a separate report that Chinese memory maker CXMT had achieved DDR5 manufacturing yields above 90% “huge if true.” CXMT announced this week that its fifth-generation memory-chip platform had entered mass production.

Burry Sees Chip Rotation, But Won’t Call The Top 

Burry expects money to move out of semiconductors, initially and possibly for longer. “The memory shortage and AI adoption narrative is sucking all the air out of the room,” he said. He also pointed to a session when major indexes broke higher while value stocks fell: “That trend is getting stronger.”

When asked whether a rotation from AI stocks into software companies would precede a market crash, Burry replied, “Not necessarily before.” New index highs made it difficult to take a short-term bearish view despite narrow market breadth, he said. Bull traps can occur near market tops, but he cautioned that too few tops have made that observation an unreliable timing guide.

Burry’s Growing Bet Against The AI Chip Rally

Burry’s latest Micron short builds on a broader bet against the AI-driven semiconductor rally that began in June. He had disclosed shorts in Nvidia (NVDA), Applied Materials, Tesla (TSLA), Caterpillar (CAT) and SOXX. He later covered the Applied Materials position. In early July, he opened a Micron short, saying that the AI-driven memory boom might differ from previous cycles, “but not nearly different enough.” Recently, he added to the Micron and SOXX shorts, while also buying more QXO (QXO), Build-A-Bear Workshop (BBW), Sprouts Farmers Market (SFM), Birkenstock (BIRK) and MercadoLibre (MELI).

Micron’s recent numbers show the strength Burry is betting against. Fiscal third-quarter revenue rose to $41.46 billion from $9.30 billion a year earlier, with an 84.6% gross margin. Micron forecast about $50 billion in fourth-quarter revenue and will report those results on Sept.30.

How Do Retail Traders Feel About MU?

On Stocktwits, retail sentiment for MU jumped to ‘bullish’ from ‘neutral’ levels a day ago amid ‘high’ message volume.

One user said, “$MU Burry lost a lot of money today. Good luck with your shorts buddy.”

Another user said, “$MU Burry is shorting Micron while buying Build-A-Bear? Sir. You’re betting against one of the companies powering the AI memory boom and buying stuffed animals? I thought Build-A-Bear faded out with shopping malls. What the hell is this thesis? Apparently memory is the bubble but stuffed animals at the mall are the future.”

MU stock has jumped 284% year-to-date.

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