Michael Burry is a name that carries a lot of weight with retail investors. When he talks, investors tend to listen — whether they intend to absorb every word unquestioningly or counter his takes with skepticism. So, as Burry entrenches himself in the nascent artificial intelligence market, investors are paying attention to the AI stocks he chooses.
Since his big short on the housing market shot him into the investing spotlight, Burry’s takes have been given a ton of weight, especially bearish ones. For the last year, he has made headlines for predictions of broad stock market hardship and a coming recession. Most boldly, he warned that the S&P 500 is severely overvalued and predicted a near-50% halving. While the halving hasn’t come yet, several dips have sown concern. His takes on lowered consumer spending, widespread layoffs and weakened earnings, though, have been more prescient.
His expertise most widely targets broad economic indicators, real estate and top indices. But, Burry is no stranger to speculative markets. His doomsaying around crypto turned to schadenfreude with the FTX collapse, for example. Nowadays, he sees auditing crypto companies as a fruitless effort, instead expecting more hardship in the space even as it attempts to clean up its act. Burry has also criticized Cathie Wood’s ARK Invest for being unable to predict the drop-off in tech value.
While he’s known for his bearish takes, he’s still sometimes bullish on new markets. That much is proven by his Q4 bets on two AI stocks.
Michael Burry’s Scion Takes on Two AI Stocks
AI stocks certainly don’t register as being Michael Burry’s bag. He has built up a reputation talking down on speculative markets. So, it might come as a surprise to see his Scion Asset Management holding two AI stocks as of the fourth quarter.
Taking a look at Scion’s portfolio, one can see that the firm holds two AI-adjacent stocks, Alibaba (NYSE:BABA) and JD.com (NASDAQ:JD).
Last year, Scion drew eyes when it dumped nearly its entire portfolio. It seemed obvious at the time that he was preparing for a bear market. Now, though, he must see something on the horizon, as Scion holds a cumulative 125,000 shares in the two Chinese stocks.
Could Burry be bullish on an AI-driven future? Sure, Alibaba and JD.com are not strictly AI companies. But, both companies are leaning heavily into the trend. JD.com, for example, has announced plans for a generative AI model to compete with the likes of OpenAI. Alibaba has announced plans to do the same. So, it appears that the investing guru might not be totally skeptical of emerging technology. It doesn’t hurt that the AI market is expecting to grow by a compound annual growth rate (CAGR) of over 37% between now and 2030.
On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
