Burry Bets Against Oracle, Cites Cloud Concerns
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The investor known for predicting the 2008 housing crisis is taking a bearish position on Oracle, fueled by skepticism about its costly expansion into cloud computing.
- Michael Burry, famous for predicting the 2008 financial crisis, is shorting Oracle Corp.
- He’s concerned about Oracle’s aggressive cloud push and the debt it’s accumulating.
- Burry prefers betting against companies heavily reliant on the AI boom,like Nvidia,rather than larger tech companies with stronger core businesses.
- He remains skeptical of the broader artificial intelligence boom, seeing Nvidia as a concentrated way to bet against it.
Michael Burry, the investor who famously predicted the 2008 financial crisis, is wagering against Oracle Corp., revealing his position in a substack post after markets closed on Friday. This move signals a growing unease with the tech giant’s aggressive push into cloud computing and the considerable debt it’s accumulating to fund that expansion. The investor believes Oracle’s current trajectory is ill-advised, and the market hasn’t fully accounted for the risks.
Oracle’s Cloud Push and Rising Debt
Burry’s bearish stance involves both purchasing put options – which increase in value as a stock’s price declines – and directly shorting oracle shares over the past six months.He previously disclosed similar bets against Nvidia Corp.and Palantir Technologies Inc. in November. Oracle, traditionally a database software company, has been investing heavily in cloud services, a move that requires notable capital expenditure for data center infrastructure.
“I do not like how it is positioned or the investments it is making. It did not need to do what it is doing, and I do not no why it is doing this. Maybe ego,” Burry wrote, responding to a question about why he chose to bet against Oracle rather than other tech firms.
Oracle’s stock experienced a rollercoaster year.In September, shares jumped 36% in a single session following a positive forecast for its cloud business, driven by demand related to artificial intelligence. Though, this surge was short-lived as investors began to focus on increasing capital expenditures, concerns about cloud deal structures, and the growing debt associated with data center expansion. By year’s end, Oracle’s stock price was approximately 40% below its September peak.
oracle currently holds roughly $95 billion in debt, making it the largest corporate issuer outside the financial sector in the Bloomberg high-grade index.
The company did not immediatly respond to a request for comment outside of regular business hours.
Selective Bets in the Tech Landscape
Burry clarified that he’s been selective in his short positions, avoiding larger technology companies with diversified businesses beyond AI. He specifically cited Meta Platforms Inc., Alphabet Inc., and Microsoft Corp.as examples.
“If I short Meta, I’m also shorting its social media and advertising dominance.If I short alphabet,I’m shorting google Search in all its forms,Android,Waymo,etc. If I short Microsoft, I’m shorting a global office productivity SaaS goliath,” Burry explained. “The big ones are not pure shorts on AI.”
He believes these established companies are likely to adjust spending, absorb capacity losses, and potentially write down assets while maintaining their dominant market positions. “These three will not go away,” he added. He stated he would short OpenAI at a $500 billion valuation, highlighting his overall skepticism regarding the rapid growth and economics of the AI sector.
Burry also identified Nvidia as the most direct way to express a bearish view on the artificial intelligence trade,noting that it is indeed “the most loved,and least doubted,” making its put options relatively inexpensive compared to other potential short targets.
