Michael Burry posted three charts making the AI bear case. Two of them show the selling already happened.

By Jennifer Song · Portfolio Watch · July 28, 2026, 11:38 AM ET

Key points

Burry shared three Bloomberg charts. Two of them show AI valuations have already come down.
Nvidia (NVDA) fell 5% on July 27 on reports of more than $750 billion in new deals, while the S&P 500 finished flat.
Apple (AAPL) never appears on Burry's circular-deals chart. It has passed Nvidia as the most valuable company and set another record on July 28.
Memory chips kept falling on July 28. Micron (MU) dropped about 9% after China's CXMT listed in Shanghai.

Michael Burry has been posting charts instead of writing arguments. The three most recent ones all come from Bloomberg, and I opened them expecting a single case against AI stocks. What I found was one chart making that case and two showing the selling has already happened.

Burry writes a newsletter called Cassandra Unchained that passed 300,000 subscribers on July 12. He also deregistered his fund, so the quarterly filing trail that used to carry his positions is gone. He now publishes through the newsletter and short posts to his readers.

The first chart is the one everybody has seen

It is titled "Nvidia Is at the Center of Circular AI Deals," and it draws the AI buildout as a set of circles sized by valuation, with colored arrows for services, investment and hardware. Nvidia (NVDA) sits in the middle with arrows running in and out in every direction. OpenAI sits directly above it in the same crowded position. Microsoft (MSFT), Google, Amazon (AMZN), Oracle (ORCL), AMD, Intel (INTC) and Anthropic ring the edges.

The claim behind it is that a good deal of this demand is the same money going around a circle. Nvidia invests in a customer. The customer buys Nvidia chips, and the revenue books as demand. We mapped how the money actually loops in this explainer. Burry sent readers to a Bank for International Settlements report on the same problem on July 23, in a post titled "3 Stock Buys & the BIS Weighs in on AI's Rampant Circular Financing," which we covered here.

The chart carries a date, and the date does some work. Those valuations are as of May 6, 2026. Google is drawn at $4.7 trillion and closed on July 27 at $3.98 trillion. Amazon is drawn at $2.9 trillion and closed at $2.49 trillion. Oracle is drawn at $533 billion and closed at $345 billion. The map is eleven weeks old and close to a trillion dollars of it has already gone.

The second chart shows who did the damage

The next one plots forward capital spending estimates against each company's share of the S&P 500's move since the start of June. Every large spender sits on the left side, in negative territory. Alphabet (GOOGL) is furthest out, near $245 billion of forward capital spending and about 40% of the index's decline on its own. Microsoft, Amazon, Meta (META), Oracle, Micron (MU) and Tesla (TSLA) trail behind it. Apple (AAPL) sits by itself over on the right at plus 20%, with almost no capital spending to speak of.

That relationship used to run the other way. Spending announcements were the reason to own these companies. Alphabet raised its 2026 capital spending guidance to as much as $205 billion on July 22, the third increase this year, and reported negative quarterly free cash flow of $5.9 billion, the first negative quarter in its history. The stock fell 7.1% the next day, its worst session in more than a year. One investor put it to Fortune last week: "It used to be more the better, but now it is less the better."

Alphabet has fallen about 13% since the start of June. The S&P 500 is down about 2.5% over the same stretch and the Nasdaq 100 is down more than 8%.

The third chart argues against him

The last one plots 12-month forward price-to-earnings ratios for six big technology companies across ten years, each with its own 10-year average marked as a dashed line. Five of the six finish below that line. Nvidia's forward multiple falls from the 60s at its peak to about 20 by July 24. Microsoft's drops from the mid-30s to under 20. Amazon's slides from near 100 down to about 20. Meta ends near 13. Alphabet lands right on its average.

Apple is the exception, and it is not close. Its multiple climbs through the entire period and finishes near 38, well above its own 10-year average of about 21.

That is an unusual thing to find sitting inside a bear case. The AI builders now trade at lower forward multiples than they have for most of the past decade, while the one company at a decade-high multiple is the one that skipped the spending.

Apple is missing from the first chart entirely

Go back and look for Apple on the circular deals map. There's no circle and there are no arrows. Apple has largely sat out the data center race, partnering with model developers rather than building the capacity itself.

On July 27 it closed at $336.91 after touching $339.57, a record at the time, worth about $4.95 trillion. Nvidia closed at $196.51, down 5% on the day, worth about $4.83 trillion. Apple is the most valuable company in the world again, and it got there by staying off the chart.

Tuesday made the same point again

The selling did not stop at Monday's close. Memory chips led another decline on July 28 after CXMT, a Chinese memory maker, listed in Shanghai. Korean financial media also reported that China had begun mass production of DUV lithography machines, the generation of equipment that came before ASML's EUV tools. Samsung Electronics fell 13% in Seoul and SK Hynix fell 14%, giving back about three months of gains between them.

By late morning in New York, Micron was down about 9% and AMD about 8%. The largest companies went the other way. Alphabet rose about 2%, Apple set a fresh record at $342.89, and Oracle touched a new 52-week low of $114.50 early in the session before recovering to trade higher on the day. Nvidia was roughly flat.

Where the argument actually lives now

If the multiples already came down, it's fair to ask what is left of the case. Burry's answer has moved to the accounting and the borrowing.

The depreciation estimate is his most specific claim. He argues the hyperscalers write their Nvidia chips down over five or six years when the real useful life is closer to two or three, and he puts the resulting understatement of expense at about $176 billion across 2026 through 2028. A forward multiple offers no protection against that, because the earnings sitting in the denominator would be the thing that is wrong.

Then there is the debt. On July 23 he wrote: "Watch the long bonds. Treasuries pressured by AI's debt explosion, rising inflation vol... Not sure how much longer PE and PC can hold their breath." PE and PC are private equity and private credit, which is where a lot of data center financing has ended up. Two days later he pointed readers at a 65-page academic paper on how private credit, private equity and insurance overlap, under the title "Offshore Insurers, Meet the Hyperscalers."

July 27 handed that half of the argument something concrete. Bloomberg reported Nvidia is working on more than $750 billion of fresh deals, including over $500 billion of business with SK Group and a possible $250 billion backstop to help OpenAI lease computing power, which we covered here. The cost of insuring Nvidia's debt against default rose as much as 14 basis points intraday, to a record 82 basis points for five-year protection. That was the biggest intraday move since those swaps started trading actively in November. Nvidia fell 5% and AMD fell 5.1% on the news, while the S&P 500 finished flat.

What the charts leave open

Burry's record is mixed enough to be worth checking before anyone treats three charts as a verdict. We laid out every position he has disclosed since June, priced as of July 27, in this piece. His bet against Micron gained again on Tuesday. The Lululemon (LULU) one has been going against him since 2025.

Taken together the three charts settle something narrower than a crash call. The repricing in AI stocks has mostly already happened, and most of it happened since June. Whether that is the market finishing an adjustment or starting one comes down to the depreciation schedules and the debt, and neither of those shows up in a forward multiple. Microsoft and Meta report after the close on Wednesday, July 29. Apple and Amazon follow on Thursday, July 30.

Filings for any of these companies are at /filings/NVDA.

Sources

Bloomberg, "Nvidia's $750 Billion in Deals Reignite Circular AI Fears" and "Nvidia Credit Risk Jumps in Swaps Market," July 27, 2026
Michael Burry, Cassandra Unchained, posts dated July 9, July 12, July 23 and July 25, 2026
Alphabet second quarter 2026 results and capital spending guidance, July 22, 2026
Fortune, "Big Tech earnings slam into a market in revolt over AI spending," July 26, 2026
뉴스1 and 한국경제, Samsung Electronics and SK Hynix declines, July 28, 2026
Closing prices and market capitalizations as of the July 27, 2026 close. Intraday prices as of about 11:30 a.m. Eastern on July 28, 2026

Frequently asked questions

What did Michael Burry say about AI stocks in July 2026?

Burry spent July making the case that AI demand is partly self-funded and that the accounting behind it understates cost. On July 23, 2026 he sent readers to a Bank for International Settlements report in a post titled "3 Stock Buys & the BIS Weighs in on AI's Rampant Circular Financing," and wrote that Treasuries were pressured by AI's debt explosion, adding that he was not sure how much longer private equity and private credit could hold their breath. On July 25 he pointed at a 65-page academic paper on private credit, private equity and insurance under the title "Offshore Insurers, Meet the Hyperscalers." He no longer files quarterly 13F reports because he deregistered his fund, so his views now surface through his newsletter Cassandra Unchained, which passed 300,000 subscribers on July 12, 2026.

Is Nvidia stock cheap or expensive right now?

It depends which multiple you use. Nvidia (NVDA) closed at $196.51 on July 27, 2026, down 5% on the day, with a market capitalization near $4.83 trillion and a trailing price-to-earnings ratio of about 32. On a 12-month forward basis, the Bloomberg chart Burry shared shows Nvidia near 20 times as of July 24, 2026, below its 10-year average of about 37 and far below the peak in the 60s. Five of the six big technology companies on that chart finish below their own 10-year averages.

What is circular financing in AI deals?

It describes an arrangement where a supplier helps fund the customer that buys its products, so the revenue partly traces back to the supplier's own money. Nvidia invests in or backstops financing for AI companies that then buy Nvidia chips or lease Nvidia-powered capacity. On July 27, 2026 Bloomberg reported Nvidia was working on more than $750 billion of new deals, including over $500 billion of business with SK Group and a possible $250 billion backstop to help OpenAI lease computing power. The cost of insuring Nvidia's debt against default rose as much as 14 basis points intraday that day, to about 82 basis points for five-year protection, the biggest intraday move since those swaps began trading actively in November.

Why is Apple stock rising while other AI stocks fall?

Apple (AAPL) has largely stayed out of the data center buildout, partnering with model developers instead of financing its own capacity, so it carries almost none of the capital spending that investors have turned against. It does not appear anywhere on the Bloomberg circular AI deals chart. Apple closed at $336.91 on July 27, 2026 after touching $339.57, worth about $4.95 trillion, which put it back above Nvidia as the most valuable public company. It set a further record of $342.89 on July 28, 2026. It is also the one name on Bloomberg's valuation chart trading well above its 10-year average, near 38 times forward earnings against an average around 21.

What is Michael Burry's $176 billion depreciation argument?

Burry argues that Meta, Amazon, Microsoft, Alphabet and Oracle depreciate their Nvidia GPUs over five to six years when the real economic life of the hardware is closer to two or three years. Stretching the schedule spreads the cost over more periods and lowers the expense booked in each one. He estimates the resulting understatement of depreciation expense at about $176 billion across 2026 through 2028. If that is right, reported earnings at those companies are too high, which would also make forward price-to-earnings ratios look lower than they should be.

How much are big tech companies spending on AI capital expenditure in 2026?

Alphabet raised its 2026 capital spending guidance to as much as $205 billion on July 22, 2026, its third increase of the year, and Microsoft is near $190 billion. Combined 2026 capital spending across Alphabet, Microsoft, Amazon and Meta runs to roughly $724 billion, with analysts projecting more than $1 trillion for 2027. The market response has reversed: Alphabet fell 7.1% on July 23, 2026 after reporting negative quarterly free cash flow of $5.9 billion, the first negative quarter in its history. It was its worst day in more than a year.

Why did Micron and memory chip stocks fall on July 28, 2026?

China's memory maker CXMT listed in Shanghai, and Korean financial media reported that China had begun mass production of DUV lithography equipment, the generation of machines that came before ASML's EUV tools. Samsung Electronics fell 13% in Seoul on July 28, 2026 and SK Hynix fell 14%, giving back about three months of gains. In the United States, Micron (MU) was down about 9% and AMD about 8% by late morning Eastern time. Nvidia (NVDA) was roughly flat and Apple (AAPL) set a record of $342.89 the same morning.

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Jennifer Song · Portfolio Watch

Jennifer Song writes Portfolio Watch. She studied finance and likes digging through public filings to see what politicians and other well-known people are buying and selling. She doesn't trade herself. She just likes seeing where the big names put their money.