Michael Burry adds to beaten-down stocks while warning of echoes of dot-com bubble
Michael Burry added to several beaten-down positions while doubling down on his warning that the market’s artificial intelligence boom is creating the kind of distortions last seen during the dot-com era. The investor, best known for predicting the housing crash and later profiled in The Big Short , disclosed fresh purchases in companies he sees as overlooked as investor enthusiasm instead pours into AI-related trades. Burry said he added to Latin American e-commerce giant MercadoLibre in the mid-$1,500 range, describing it as a “clean long-term winner” trading at a discount because of its international exposure. He also boosted positions in software maker Adobe , payments company PayPal and animal-health company Zoetis , while building a full-sized stake in athletic apparel retailer Lululemon . “These stocks are part of the mass whale fall happening away from the main spectacle,” Burry said in a Monday evening Substack post. “In 1999 this happened too. The old economy and international stuff just got ditched in favor of the All-American bubble.” The latest moves come as Burry has grown increasingly vocal about what he sees as speculative excesses tied to artificial intelligence. In recent weeks, the high-profile investor warned that the current market environment feels like “the last months of the 1999-2000 bubble ,” drawing comparisons to the final stages of the dot-com era. He also urged caution around momentum-driven trades, saying investors should, ” for any stocks going parabolic, reduce positions almost entirely. ” ‘Just an asset bubble, plain and simple’ Burry drew comparisons to the late stages of the technology bubble of the late 1990s, arguing that capital has become increasingly concentrated in AI-linked themes at the expense of older industries and international companies. Citing data from Apollo Chief Economist Torsten Slok, Burry noted that 87% of venture capital funding is now directed toward AI-related companies, while AI-linked borrowers account for nearly half of investment-grade bond issuance and roughly 38% of high-yield debt issuance. Those figures increasingly resemble the dynamics that preceded the collapse of the dot-com boom, when internet and telecom-related companies dominated financing activity, Burry said. More than $100 billion of investment-grade debt issued during the technology boom of 1999 and 2000 was eventually downgraded to junk status within a few years, he noted. “It is just an asset bubble, plain and simple,” he said. “Debt issuance always starts out clean. That’s how it gets sold.”
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