Michael Burry, the investor who famously warned about the 2008 housing crash, is now betting that Oracle’s AI‑driven surge will stall.
What Burry Is Doing
In his recent newsletter, Burry said he has bought put options on Oracle shares. A put option gives the holder the right to sell a stock at a set price, so buying puts means he expects the price to fall.
Why Oracle Is in the Spotlight
Oracle’s stock jumped sharply in September after the company announced strong growth in its cloud business, which it linked to AI demand. However, the share price later slipped about 40% from that high.
- Oracle carries roughly $95 billion of debt, the largest for any non‑financial company in the Bloomberg high‑grade index.
- Investors are worried about rising capital spending, uncertain cloud deals, and the cost of expanding data‑center capacity.
Burry’s Reasoning
Burry says he does not like how Oracle is positioned or the investments it is making. He suspects the moves may be driven more by ego than sound strategy.
He also explained why he is not shorting other big AI‑related names like Microsoft, Alphabet (Google) or Meta. Those companies have large businesses beyond AI, so a short position would also hurt their core earnings.
What This Means for Retail Investors
If Oracle’s stock continues to drop, investors who own the shares could see losses. On the other hand, those who follow Burry’s lead might consider similar strategies, but they should remember that short bets can be risky.
Key Takeaways
- Burry has put options on Oracle, expecting the price to fall.
- Oracle’s rapid AI‑related growth is offset by high debt and cloud‑business doubts.
- Burry avoids shorting larger tech firms because their core businesses remain strong.
Remember, this is just one investor’s view, not a prediction. Do your own research and consider your risk tolerance before making any trades.