Michael Burry Warns AI Stock Rally Could Mirror Dot-Com Bubble Risks

Michael Burry, the investor best known for calling the 2008 housing crash, is warning that the market’s surge in artificial intelligence-linked stocks is reaching bubble-like extremes and could be vulnerable to a sharp reversal. In recent posts, the hedge fund manager said the current price action resembles the late stages of the 1999 to 2000 dot-com period, pointing in particular to a steep run-up in chip stocks and to valuations he argues are being supported by unusually optimistic earnings narratives.

Burry said investors appear to be focusing narrowly on AI-related momentum rather than broader economic indicators. He cited a recent episode in which the S&P 500 rose to a record high after a slightly better-than-expected jobs report while, in his view, a separate weak consumer sentiment reading drew little attention. “Absolutely nonstop AI. Nobody is talking about anything else all day,” he wrote, arguing that stocks were moving independently of underlying data.

Central to his case is what he describes as an earnings premium that has outpaced fundamentals. Burry compared the Philadelphia Semiconductor Index’s sharp advance to the run-up before the 2000 market collapse, and he...