Michael Burry warns AI-driven stock market resembles 1999-2000 bubble
Updated
Updated · CNBC · May 8
Michael Burry warns AI-driven stock market resembles 1999-2000 bubble
13 articles · Updated · CNBC · May 8
In a Substack post, he said the S&P 500 hit a record high Friday while the Philadelphia Semiconductor Index jumped over 10% this week, taking its 2026 gain to 65%.
Burry argued shares are rising on momentum rather than reacting logically to jobs data or weak consumer sentiment, with AI enthusiasm dominating financial coverage and valuations.
AI-linked semiconductor and mega-cap technology stocks have driven repeated market highs for two years, while investor Paul Tudor Jones also says the rally resembles 1999 and could end in a sharp correction.
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Michael Burry’s 2026 AI Bubble Warning: $176 Billion in Inflated Tech Profits and Market Risks
Overview
In 2026, Michael Burry warns that the AI stock surge mirrors the dot-com bubble, highlighting risky overvaluations in companies like Nvidia and Palantir, against which his firm takes bearish positions. He exposes how tech firms extend the accounting 'useful life' of AI hardware, understating depreciation by up to $226 billion through 2028, inflating profits and distorting valuations. This disconnect between rapid AI hardware obsolescence and accounting practices, combined with dominant passive investing that funnels capital into mega-cap AI stocks, creates a fragile market structure. While bulls emphasize strong AI-driven earnings and long-term potential, Burry’s caution signals a looming correction, urging investors to hedge, diversify, and scrutinize fundamentals carefully.