Micheal Burry's AI Bubble Warning: What Wall Street Doesn’t See - And How I'm Positioning My Portfolio

Michael Burry recently released a series of articles breaking down what he believes is the most misunderstood risk in today’s AI boom - and after digging into his research, I’ve uncovered several critical points I want to share with you.

I’ll also breakdown how I personally structure a portfolio to help manage this environment and reduce exposure to these risks.

These insights are not surface-level. They get to the structural forces driving this market, and more importantly, the risks that most investors aren’t even looking at yet.

Over the past few months, I’ve been positioning cautiously and building ETF portfolios specifically designed to navigate this period of extreme volatility. So far, that approach has paid off - the portfolio has outperformed the S&P 500, delivering more than 40% the returns while capturing only a fraction of the volatility.

If you haven’t read my breakdown yet, I highly recommend checking it out:

(note: my actual portfolio includes more components)

Now back to Burry’s article - Most people still believe the late-1990s boom was driven by the “profitless .coms” - Pets.com, Webvan, Ask Jeeves, VA Linux.
But as Michael Burry correctly points out, that narrative is flat-out wrong.

Those companies IPO’d extremely late (Q4 1999–Q1 2000) and had almost no impact on the NASDAQ’s historic surge.

In reality, the bubble was powered by huge, wildly profitable giants:

• Microsoft

• Intel

• Dell

• Cisco

• Qualcomm

• Oracle

• Sun Microsystems

• Applied Materials

• Amgen

This is the key insight most investors miss.

The Dotcom bubble wasn’t led by weak, speculative companies - it was driven by a concentrated group of billion-dollar profit machines growing at incredible speed.
Exactly like what we’re seeing today.

So what actually caused the bubble?

And how does that relate directly to the AI market we’re living in right now?

This is where Burry’s argument becomes impossible to ignore.

Is there truly an AI bubble forming?

And if so - how can we see it before everyone else?

This is where things get very interesting… and where the parallels become almost exact.