Michael Burry [Getty Images]
Michael Burry [Getty Images]

Investor Michael Burry, the real-life figure behind the film "The Big Short," warned that the US stock market has entered the first stage of a crash and that the second stage is only six to nine months away.

According to investment media outlet MoneyWise, Burry wrote on X on Tuesday (local time) that "the stock market has clearly entered the first stage of grief — denial," adding that in 2000 and 2008, that stage lasted six to nine months.

Applied to the current moment, that timeline would place the end of the denial phase somewhere between the first and second quarters of 2027. Burry stopped short of pinpointing an exact date, writing, "We seem to be somewhere in the middle of it, though it's hard to say exactly where."

Burry made a fortune betting on the collapse of the US housing market ahead of the 2008 global financial crisis. More recently, he has maintained a persistently bearish outlook on AI-related stocks.

He has particularly focused on semiconductor and data center investment underpinning the AI boom. His argument is that if AI chip technology advances faster than the lifespan of data centers, existing infrastructure could become obsolete sooner than expected, creating significant cost burdens.

Burry has also raised the possibility that major tech companies pouring money into AI infrastructure could face accounting depreciation problems down the road. He earlier estimated that depreciation costs for major hyperscalers could be understated by more than $175 billion between 2026 and 2028.

Burry has recently converted existing short positions in Nvidia, Palantir and Micron into put options, continuing to bet on declines. He believes AI-related stock valuations have become excessively stretched and that the current semiconductor supply shortage will ultimately ease as supply increases.

Not all investors share Burry's view, however. Steve Eisman, another real-life figure from "The Big Short," rebuffed Burry's AI semiconductor depreciation argument on a recent podcast, calling it "too academic."

Eisman argued that if Anthropic and OpenAI continue to grow rapidly and hyperscalers perform well, "it won't matter much if the depreciation period for chips shifts from three to four years to five to six years." He also said demand for semiconductors remains so strong that even older chips are seeing significant demand.


bbo@heraldcorp.com