Burry warns NVDA revenue is majority circularly financed, while ORCL plans to raise $40B in debt to fund a $70B capex program. <\/p>\n<\/li>\n
PLTR trades at 148x trailing P\/E and SOXX surged 74% YTD, metrics Burry says reflect an AI mania built on obscured leverage. <\/p>\n<\/li>\n
Data center construction kept accelerating even as rate-sensitive sectors fell 7.9% YoY, a divergence Burry says signals dangerous GDP dependency on AI spending. <\/p>\n<\/li>\n
Don’t wait: the analyst who called NVIDIA in 2010 just revealed his top 10 AI stocks. See the full list FREE now<\/a>. <\/p>\n<\/li>\n<\/ul>\n Michael Burry issued a fresh warning Friday that the AI data center boom mirrors the structural excesses that preceded 2008, arguing that circular financing, off-balance-sheet vehicles and captive insurers are quietly building leverage across the ecosystem. The investor behind the Big Short trade reportedly declared in a Substack post that “The shenanigans are apparent today for those that care to look.” <\/p>\n NVIDIA<\/strong> (NASDAQ:NVDA<\/a>) stock is down 0.9% to $214.87 in Friday midday trading, its sixth straight losing session. Notably, Micron Technology<\/strong> (NASDAQ:MU<\/a>) shares are falling 1% to $961.96, extending a pullback from record levels reached on HBM4 memory shipments. <\/p>\n Meanwhile, Oracle<\/strong> (NYSE:ORCL<\/a>) stock is rising 3% to $146.81, one of several names Burry called out. Also, Palantir Technologies<\/strong> (NASDAQ:PLTR<\/a>) shares are climbing 4% to $180.20 in a session shrugging off the Substack, while Nebius Group<\/strong> (NASDAQ:NBIS<\/a>) stock is up 0.1% to $220.28. That’s just one day of share-price gains, but investors might wonder how Burry is justifying his cautionary tone. <\/p>\n Circular Financing at the Heart of the Warning <\/p>\n Burry’s central charge is that a growing share of NVIDIA’s future revenue is “majority financed in a circular arrangement” rather than pulled through by organic end-user demand. He points to special-purpose vehicles, off-balance-sheet financing and captive insurers as mechanisms that can absorb risky debt while making leverage harder to see from the outside. <\/p>\n Don’t wait:<\/strong> the analyst who called NVIDIA in 2010 just revealed his top 10 AI stocks. See the full list FREE now<\/a>. <\/p>\n The pattern shows up at Oracle. In its Q4 FY26 report, Oracle disclosed remaining performance obligations of $638 billion, with $75 billion tied to bring-your-own-hardware or prepaid customer arrangements. Oracle also plans to raise $40 billion in debt and equity in fiscal 2027 to fund a $70 billion capex program, per its 8-K filing. <\/p>\n Nebius Group tells a similar story from the buyer side. The company’s disclosed capital stack\u00a0 (including NVIDIA pre-funded warrants, convertible debt and uncommenced lease obligations) reflects the sort of intertwined arrangements Burry says obscure true leverage. <\/p>\n Story Continues <\/p>\n Data That Sparked the Warning <\/p>\n Burry anchored his argument to data from Torsten Slok, Apollo’s chief economist, showing that data-center construction accelerating even after the Federal Reserve began raising rates in 2022 while rate-sensitive segments contracted. Moreover, private non-residential construction excluding data centers fell 7.9% year over year in June. <\/p>\n In the same post, Burry asserted, “GDP growth is really counting on that data center buildout.” Slok reads that resilience as evidence investors expect AI returns to justify the cost of capital, while Burry treats it as a risk indicator worth flagging. <\/p>\n Semiconductors as a group capture the boom he is questioning. The iShares Semiconductor ETF<\/strong> (NASDAQ:SOXX<\/a>) was up 74% year to date (YTD) through Thursday’s close, and Micron stock was up 242% over the same stretch on HBM4 memory shipments. <\/p>\n Names Burry Has Positioned Against <\/p>\n Burry has positioned against several AI infrastructure names, including Micron Technology, Oracle, Nebius Group and Palantir Technologies. PLTR stock trades at a trailing P\/E ratio of 148.68x and a price-to-sales ratio of 67.91x, valuations that leave little room for a growth stumble. <\/p>\n Furthermore, Friday’s session argues both ways. Oracle stock and Palantir Technologies stock are rising against his thesis, and NVIDIA stock and Micron shares are falling in line with it. NVIDIA’s slide predates the Substack post, extending a five-session losing streak through Thursday. <\/p>\n The chipmaker’s own disclosures illustrate the scale in play. NVIDIA reported Q1 FY27 revenue of $82 billion, and total supply commitments and prepaids reached $145 billion. CEO Jensen Huang stated on the call that “Demand has gone parabolic.” <\/p>\n What Investors Can Take Away <\/p>\n The question Burry is raising centers on whether the investment boom has built a financial system that now depends on AI demand continuing at its current pace. Nebius, NVIDIA, Oracle’s capex program and Micron Technology’s take-or-pay memory contracts all sit inside that dependency loop. Riding a mania is fine as long as you plan the exit, and we covered both halves in a free bubble survivor’s handbook. <\/p>\n Traders can size AI infrastructure exposure with an eye on financing structure disclosures rather than headline growth alone. Shareholders may want to watch how remaining performance obligations at Oracle and Nebius convert into cash flow over the coming quarters. <\/p>\n Don’t wait:<\/strong> the analyst who called NVIDIA in 2010 just revealed his top 10 AI stocks. See the full list FREE now<\/a>. <\/p>\n<\/a> Photo by Astrid Stawiarz\/Getty Images <\/p>\n