Michael Burry Shorts AI Chip Sector as Memory Stocks Slide

Investor Michael Burry opened short positions against the iShares Semiconductor ETF as of June 30, 2026, signaling a belief that the artificial intelligence spending boom is unsustainable. Burry's thesis focuses on the gap between the high valuations of chipmakers and the slower returns realized by the companies buying the hardware. This outlook coincides with a UBS Group survey showing that roughly 60% of businesses are reducing their AI spending.

Market volatility intensified on July 8, as shares of AI memory companies including Micron Technology, Sandisk, and Western Digital Inc. dropped more than 3%. The sell-off was driven by fears of slowing infrastructure spending by hyperscalers and a lack of investor confidence following record profits at Samsung Electronics. Additional pressure came from reports that Chinese startup DeepSeek is developing its own AI chip.

Despite the downward trend affecting firms like Intel, AMD, and Broadcom, SK Hynix intends to test market appetite by seeking approximately $28 billion through a US-listed IPO.