🚨The well-known financier Michael Burry, who became famous for his accurate prediction of the 2008 mortgage crisis, has once again drawn the attention of investors and financial analysts with his alarming statements. In his view, the US stock market may face a decline that could surpass even the dot-com crisis of the early 2000s, and the main reason lies in the overheated segment of companies associated with artificial intelligence, as well as in structural changes in investor behavior, reports Economic Times.
Burry emphasized that the shares of corporations working in the AI sphere are growing significantly faster than their fundamental indicators allow. According to him, a number of companies show strong overvaluation based on investor expectations and forecasts of future profits, rather than on real and sustainable earnings. The investor pointed out that the current multipliers of certain issuers even exceed the levels of the late 1990s, when the dot-com bubble was forming.
Burry paid particular attention to the influence of passive investments on the market. According to his estimates, index funds and ETFs control more than half of all US stocks. Such a structure, in his view, reduces the share of active analysis of companies and may intensify price declines during periods of market stress, creating an avalanche effect in the event of a market correction.
Another alarming signal, according to Burry, is related to the accounting methods of technology companies. Some companies extend the depreciation periods of AI-related equipment, which allows them to inflate reported profits by hiding real financial risks. In his opinion, such methods may distort the true stability of the business, misleading investors about the company’s health.
In addition to his public statements, Burry confirmed that he has adjusted his own strategy. He closed his hedge fund to avoid attracting outside capital and established bearish positions against large technology companies focused on artificial intelligence. This move by the financier has become a signal to the market about possible high volatility in the coming months and the need for careful portfolio analysis.
At the same time, Burry stressed that he is not predicting the exact date of a possible crash. His warning concerns systemic factors: the overvaluation of certain market segments, the structure of capital flows, the high dependence on passive investments, and underestimated earnings risks. He strongly recommends that investors take these features into account when building their own investment strategies.
It is worth noting that earlier Google CEO Sundar Pichai also warned about the risks of an AI bubble that could affect the entire technology industry. According to experts, statements by such influential investors and corporate leaders highlight that the technology and AI market requires careful analysis and a cautious approach, especially against the backdrop of rising volatility and high valuations of many companies in the artificial intelligence sector.
🔍 Overall, Michael Burry’s position reminds investors of the need to combine strategy with caution, evaluate companies’ fundamental indicators, and take into account systemic risks that may emerge even amid strong market growth.
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