Investor Michael Burry revealed Monday that he has added to positions in multiple companies he views as undervalued, and he issued a broad warning about capital concentration in artificial intelligence-related investments.
Burry said he increased his holding in Latin American e-commerce platform MercadoLibre at around the mid-$1,500 range, calling it a "clean long-term winner" that is trading at a discount because of its international exposure. In addition to MercadoLibre, he reported enlarging positions in Adobe, PayPal and Zoetis, and he said he established a full-sized stake in apparel retailer Lululemon.
These moves, he said, reflect an investment thesis that selected older-economy and international companies are being neglected as money chases AI-linked opportunities. Burry drew a direct parallel to 1999, when financing and investor attention flowed disproportionately to internet and telecommunications firms and left other segments of the market sidelined.
To illustrate the current concentration of capital, Burry cited figures attributed to Torsten Slok, chief economist at Apollo. Those figures show that roughly 87% of venture capital funding is going to companies tied to AI. In the debt markets, Slok019s data indicate AI-linked borrowers now represent nearly half of investment-grade bond issuance and about 38% of high-yield debt issuance.
Burry compared these contemporary metrics to the financing dynamics that preceded the dot-com collapse, noting that more than $100 billion of investment-grade debt issued during the 1999-2000 technology boom was subsequently downgraded to junk within a few years. Based on these observations, he labeled the present environment an asset bubble.
The investor argued that this concentration has left certain companies overlooked, prompting his repositioning into names he views as attractively priced. He framed his actions as adding exposure to firms he judges to be durable long-term winners that have been penalized by the shifting allocation of capital into AI-related investments.
Key points
- Michael Burry increased holdings in MercadoLibre, Adobe, PayPal and Zoetis, and opened a full-sized stake in Lululemon.
- He warned that a heavy flow of capital into AI-related companies is causing market distortions similar to those before the dot-com crash.
- Data cited show about 87% of venture capital now goes to AI-related firms, with AI-linked borrowers representing a large share of recent bond issuance.
Risks and uncertainties
- The concentration of venture capital and debt issuance in AI-related companies could create vulnerability in financing markets if valuations and credit quality later deteriorate - this affects both venture-backed startups and corporate borrowers across sectors.
- Historical comparisons to the late 1990s suggest the potential for downgrades and credit stress in bonds issued during a boom - investment-grade and high-yield markets could be exposed.
Note: This coverage reports the investor's statements and the cited financing figures as presented. It does not introduce additional data or extend the investor's conclusions beyond the information disclosed.