Michael Burry, the famed “Big Short” investor, issued an ominous warning on X, suggesting that the current “Cloud then AI Buildout” has created a capital expenditure bubble rivaling the DotCom and Housing peaks.
Burry Mocks Euphoric Market CapEx Chart
In a cynical two-part post, Burry mocked a euphoric market for ignoring the clear and present danger, comparing investors to those who would see “Live Love Laugh” inscribed on the Lord of the Rings’ “One Ring.”
The post featured two images. The first, a chart from “Scion/Bloomberg,” plots “(S&P 500 Total Capital Expenditures Less Depreciation)/Nominal US GDP.” This ratio calculates the Net Capital Expenditure as a percentage of Nominal U.S. GDP, which seems to be highest during bubbles.
It visually argues that the current investment spike, driven by AI, soars past the peaks of the 2000 “DotCom & TMT Boom” and the 2007 “Housing Bubble.”
The second image, a popular meme, shows the character Gandalf asking, “What can you see?” while the ring of power reveals the benign phrase “Live Love Laugh,” implying investors are blind to the obvious threat. Burry captioned the post: “One chart to refute them all… to be continued Nov 25th, or before.”
‘Big Short’ De-Registers His Hedge Fund
This post lands as a powerful parting shot. The warning comes just days after it was confirmed that Burry has de-registered his hedge fund, Scion Asset Management, with the SEC.
In a letter to investors, Burry explained his decision to liquidate the fund by year’s end, citing a long-term disconnect between the market’s behavior and his own assessments of value.
Burry Is Super-Bearish On Palantir, Nvidia
His final regulatory filings showed Scion held massive bearish put options against AI-related stocks, including Nvidia Corp. (NASDAQ:NVDA) and Palantir Technologies Inc. (NASDAQ:PLTR), making this chart a direct visualization of his (now private) bearish thesis.
By pairing this stark data with the “Live Love Laugh” meme, Burry delivers a cynical commentary: the market is looking directly at a bubble of historic proportions, but is too euphoric to see the risk.
The “Nov 25th” tease in his post aligns with previous comments he made about “on to much better things,” signaling his next move after stepping away from public fund management.
The futures of the S&P 500, Nasdaq 100, and Dow Jones were trading higher on Monday after a mixed close on Friday.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
