Michael Burry, the investor famous for predicting the 2008 financial crisis during The Big Short, is steering clear of the artificial intelligence frenzy currently gripping Wall Street. While many traders continue to chase the high of tech stocks, Burry describes the atmosphere as a crowded house party filled with blind optimism. In a recent update shared via Substack, he admitted to ignoring the excitement, comparing the current obsession with AI infrastructure to the dangerous bubbles of the dot-com era and the mid-2000s housing crash.
Instead of betting against technology companies directly, Burry is playing a subtler game by investing in the raw materials that power them. His most significant new move is a bet on Ero Copper, a Brazilian mining firm. Burry argues that while everyone else is focused on software and chips, they are forgetting that these systems require massive amounts of physical wiring. He believes we are heading toward a severe structural deficit in copper because major new discoveries have dried up since the nineties, and it takes nearly two decades to bring a new mine into production.
Beyond metals, Burry is diversifying his portfolio with several unconventional plays across various sectors. This includes taking a position in QXO, a building products distributor led by experienced entrepreneur Brad Jacobs. He is also hunting for value in deeply discounted stocks that have been battered by the market over the last year, adding names like Australian furniture retailer Temple and Webster, Sprouts Farmers Market, and animal health giant Zoetis to his holdings.
By shifting his focus away from Silicon Valley and toward commodities and undervalued retail assets, Burry is once again positioning himself against the prevailing crowd. To him, the warnings signs are flashing red just as they did in 2007 when officials insisted there was no housing bubble. Rather than joining the celebration inside the house party, he seems content to wait on the sidelines where he believes true value actually resides.
