Burry Bets Against AI Darling Oracle

Michael Burry, the investor who gained fame for his prescient bet against the US housing market, has revealed a bearish outlook on Oracle Corporation. Burry disclosed that he possesses put options on Oracle shares, a financial instrument that profits if the stock's value declines. He also indicated that he had directly shorted Oracle over the past six months.

Oracle's recent aggressive expansion into cloud-computing services has led to significant debt accumulation for data center build-outs. Burry expressed disapproval of the company's current investments and strategic direction, suggesting it may be driven by ego. Despite Oracle's stock surge in September, driven by positive cloud forecasts tied to AI, investor concerns about capital expenditures and debt have since impacted its valuation.

Burry clarified that he intentionally avoids shorting major technology companies like Meta, Alphabet, and Microsoft, as their businesses extend far beyond artificial intelligence. He views them as too diversified to be purely shorted on AI trades. He views Nvidia as the most concentrated way to express a bearish view on AI, while he would consider shorting OpenAI at a significantly higher valuation.