Michael Burry Predicts 1987 Style Market Crash

Michael Burry is sounding the alarm on the US stock market again. Even as the S&P 500 recently reached a new record high, the investor famous for predicting the 2008 housing crisis claims we are nearing a major top. He warns that the market could face a crash similar to the one experienced in 1987.

Burry points to the AI sector as a primary area of concern. He suggests that the current demand for artificial intelligence infrastructure relies on financing that will not last. He is currently betting against several major names in the space including Tesla, Palantir, and Nvidia. While most of his short positions are profitable, he noted that his bet against Nvidia remains a losing trade for now.

The S&P 500 and Nasdaq recently climbed as corporate earnings improved and oil prices fell. Burry admits that these new highs tend to draw more money into the market. However, he remains skeptical of the current momentum. Investors should watch Nvidia earnings on August 26 as a major test for his bearish thesis. Burry stated he would cut his losses if the market moves decisively against his positions.