Not Meta, not Microsoft Corporation "big short" Burry sets sights on Oracle Corporation (ORCL.US)

Renowned investor Michael Burry, famous for betting against the 2008 financial crisis, is now turning his skepticism about the artificial intelligence boom into substantial short positions against tech giant Oracle Corporation (ORCL.US). After the market closed on Friday, Burry revealed in his blog that he holds put options on Oracle Corporation stock. Typically, the value of put options rises when the price of the underlying asset falls. Burry also mentioned that he had directly shorted Oracle Corporation in the past six months. Previously in November last year, he had disclosed short positions against AI chip giant NVIDIA Corporation (NVDA.US) and data company Palantir (PLTR.US). Although Oracle Corporation is known for its database software, it has recently been heavily investing in cloud computing services, requiring significant capital investment in building data center capacity and assuming significant debt pressure. "I don't like its strategic positioning and the investments it's making. It didn't have to do this, and I don't know why it did. Perhaps out of arrogance," Burry wrote in response to a reader's question about why he chose to short NVIDIA Corporation instead of Oracle Corporation. He did not disclose specific details of this options trade. This view comes at a time when Oracle Corporation's stock price has experienced a turbulent year. In September last year, the stock price surged by 36% in a single day as the company issued optimistic forecasts for its cloud business and signaled a surge in AI demand. However, these gains quickly evaporated as investors turned their focus to increasing capital expenditures, structural issues in some cloud transactions, and rising debt related to data center expansion. By the end of last year, Oracle Corporation's stock price had fallen by about 40% from its September peak. Currently, Oracle Corporation has outstanding debt of about $95 billion, making it the largest company issuer of bonds outside the financial industry in the Bloomberg High-Yield Index. The company did not immediately respond to requests for comment outside of regular business hours. Burry explained why he avoids shorting large tech companies with business models that extend far beyond AI, using Meta, Alphabet, and Microsoft Corporation as examples. "If I short Meta, I'm also shorting its social media and advertising dominance; shorting Alphabet means shorting Alphabet Inc. Class C search and its various forms, Android, Waymo, and more; shorting Microsoft Corporation is shorting a global productivity SaaS giant," he wrote, "These giants are not pure AI short targets." He believes that these companies are likely to gradually control spending, absorb losses from overcapacity, and potentially write down assets, but they will continue to dominate in their core businesses. "These three companies are not going anywhere," he added. Burry stated that he would be willing to short OpenAI with a valuation of $500 billion, further highlighting his widespread skepticism about the speed and economic benefits of AI development. He described NVIDIA Corporation as "the most concentrated target for expressing a bearish view on AI transactions." "NVIDIA Corporation is also the most sought after and least doubted. Therefore, shorting it is low cost, with its put options even cheaper than those of other larger short targets on the market that are more questionable," Burry wrote.