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Michael Burry Warns U.S. Market May Be Near a Major Top

He says volatility-targeting funds and large circular AI financing could spark a rapid, program-driven selloff with Nvidia’s upcoming earnings as a near-term test.

Overview

  • Burry reiterated his bearish view in early August, telling subscribers that the market could be close to a major top and that a sudden, 1987-style drop is possible.
  • He continues to hold disclosed short positions and put options on the iShares Semiconductor ETF (SOXX) and several large names including Nvidia, Micron, Caterpillar, Palantir, Tesla, and Applied Materials.
  • Burry said he shorted SOXX in late June and refreshed puts as the ETF then fell about 21% by the end of July, a move he cites as validation of his timing on chip stocks.
  • He warned that volatility-targeting funds, which he estimates manage roughly $500 billion, can be forced to cut exposure when volatility rises and that automated selling could amplify losses across markets.
  • Burry sharply criticized large, circular financing arrangements backing AI infrastructure and said Nvidia’s Aug. 26 earnings will be a key near-term catalyst that could either widen or reverse his Nvidia position.