Big short Burry increases short positions on Micron and Nebius, with the logic that "memory supply surge will put downward pressure on prices"

Believing firmly that the supply-demand dynamics in the memory market are reversing, Michael Burry has significantly expanded his short bets on the semiconductor sector.

As disclosed by Burry himself in a post on Substack, he has further increased his short positions on Micron Technology, AI infrastructure company Nebius, iShares Semiconductor ETF, and Palantir, emphasizing that this operation is "quite large in scale." The immediate trigger for this move was Acer CEO Jason Chen's public warning that memory inventories are building up, new supply will gradually impact the market, and price pressures are expected to emerge around the end of 2027.

This news did not stop related stocks from rising in the short term—Micron's share price rose more than 2% intraday, SOXX climbed about 1.5%, and both Nebius and Palantir saw slight gains. This means Burry's short positions are under short-term pressure, but he stated that Acer's CEO's comments "align with what I believe."

Short Thesis: AI Drives HBM Demand, But Regular Memory Supply Is Rebounding

Burry's core argument is that the previous memory market shortage was not a result of structural demand-side boom, but rather a temporary supply-side mismatch. He explained that major manufacturers like Samsung, SK Hynix, and Micron, in order to meet the strong demand for high bandwidth memory (HBM) from AI data centers, shifted a large amount of capacity from traditional DRAM to HBM, resulting in tight supply of regular memory.

However, as manufacturers gradually restore capacity for regular memory and new supply from various regions around the world is steadily released, Burry believes that the output of "normal DRAM" is rebounding, the supply-demand gap will continue to narrow, and ultimately this will put downward pressure on prices.

Acer CEO Jason Chen's comments provide fresh evidence for this thesis. In an interview, Chen pointed out that memory inventories have been accumulating, and suppliers from multiple regions are bringing more capacity to the market, which challenges the mainstream expectation that "the current shortage will last for years." After quoting this interview, Burry wrote that although interpreting this news is "full of uncertainty," its direction is consistent with his own judgment.

Short Position Management: From Nvidia to Micron, Expanding the Range

Burry’s bearish positioning toward the semiconductor sector was not built overnight. According to disclosures, his firm Scion Asset Management had already established sizeable put positions on both Nvidia (NVDA) and Palantir in the third quarter of 2025, and subsequently closed the fund.

Entering 2026, Burry continued and expanded these trades in his personal capacity. In late June 2026, he shorted Nvidia, Applied Materials (AMAT), and iShares Semiconductor ETF, rolling over SOXX puts through March 2027. Two days later, he added Micron to his short portfolio by establishing a direct short position at around $1,051, explaining that he chose to short directly instead of buying puts because Micron's option premiums were excessively expensive.

This latest increase further strengthens his prior arrangements, marking a growing conviction in his judgment that the memory cycle has peaked.

Retail Sentiment Diverges from Burry's Outlook

Judging from the market's immediate reaction, retail investors are not convinced by Burry's bearish thesis. According to Stocktwits data, retail sentiment towards both Micron and SOXX was "bullish" on the day Burry posted, Nebius also saw more bullish retail sentiment, with only Palantir showing a "bearish" stance among retail investors.

This divergence reflects the market's overall optimism toward AI-related semiconductor stocks, which directly contradicts the supply glut and price decline thesis on which Burry is betting. For investors, the core question is: just when will the semiconductor industry's capacity expansion finally catch up to demand—which is precisely the key variable in Burry's entire investment logic.