Michael Burry Says Stock Market Is in ‘Denial’ Phase Like 2000 and 2008 — ‘This Stage Lasts 6-9 Months’ — Flags Risks to Data Center Financing
Michael Burry, the ‘Big Short’ investor, said that the apparent market calm may be masking worsening private-credit stress, including risks tied to data-center financing.
He took to X on Tuesday and described the current stock market as being in the “denial” stage of grief, drawing parallels to the lead-ups to the 2000 dot-com bust and 2008 financial crisis, where this phase lasted 6-9 months before sharper declines.
“The stock market is quite obviously in its first stage of grief, denial. Per 2000 and 2008, this stage lasts 6-9 months,” he wrote.
When a user asked if he is bullish over the next 6–9 months, Burry said he is "somewhere in there," though he acknowledged it is difficult to pinpoint the timing. He warned that private equity and private credit are facing stress beneath the surface, while insurers are holding too many bad assets.
Burry said these issues could affect data center financing, particularly amid project delays. Meanwhile, companies are rapidly building their own small language models using the cheapest options available, including Chinese open-weight models.
Burry, Analysts Flag AI Bubble Risks
Burry’s warning follows his Tuesday argument that major technology companies are spending aggressively on data centers because they expect artificial intelligence (AI) leaders to become an oligopoly too important to fail.
He wrote that "the only reason the CEOs of these tech monopolies are spending wildly on data centers like they are is because they assume they will be granted an oligopoly that is too big [to] fail."
Analysts Joachim Klement and Francisca Reis of Panmure Liberum warned that an AI downturn could push the S&P 500 to 5,000 by the end of 2027. Klement said upcoming earnings and 2027 guidance will offer a "critical reality check" on AI spending.
With hyperscaler capex potentially reaching $1.2 trillion in 2027, Klement said both rising and falling spending could create risks for technology stocks, chipmakers and data center equipment firms. He warned the AI bubble could burst in 2027 or 2028, potentially amid further rate hikes.
Price Action: On a year-to-date basis, the SPDR S&P 500 ETF Trust (NYSE: SPY) and Invesco QQQ Trust ETF (NASDAQ: QQQ), which track the S&P 500 and Nasdaq-100, respectively, surged 14.25% and 23.66%, as per Benzinga Pro.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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