Michael Burry Shorts Semiconductor ETF at 74.3 P/E, Flags AI Slowdown
NVDA•Michael Burry has opened a short position in the iShares Semiconductor ETF, targeting Nvidia, Micron and AMD, noting the group trades at a collective P/E of 74.3, over twice the Nasdaq-100 tech index. He cautions that corporate AI infrastructure spending growth will slow as businesses reassess budgets.
1. Burry’s Semiconductor Short
Investor Michael Burry has initiated a short position in the iShares Semiconductor ETF (SOXX), effectively betting against leading chipmakers Nvidia, Micron and AMD. This move echoes his prior high-profile shorts and signals skepticism toward current market exuberance in semiconductors.
2. Elevated Valuation Concerns
Burry highlights that the ETF’s holdings carry a weighted average price-to-earnings ratio of 74.3, more than double the Nasdaq-100 tech index’s P/E, suggesting that chip stocks may be overpriced relative to historical norms.
3. Warning on AI Infrastructure Spending
He argues that businesses will begin to curb AI infrastructure investments as near-term returns become less certain, potentially reducing demand for high-end GPUs and specialized AI accelerators.
4. Implications for Nvidia
Nvidia, which accounts for a significant portion of the ETF’s weight, could face downward pressure on its stock if AI spending growth decelerates, amplifying volatility and testing bullish sentiment.
