Michael Burry: Big Tech's AI Spending Drags S&P 500 Down, Apple Outperforms
"Big Short" investor Michael Burry stated on July 27 that "the market has voted," indicating that Big Tech's AI spending is negatively impacting the S&P 500. He cited charts showing a negative correlation between tech companies' forward capital expenditure on AI and their stock performance. Nvidia, Microsoft, Amazon, Alphabet, and Meta have seen their valuations fall below their 10-year average as of July 24. In contrast, Apple, with relatively restrained AI spending, is an outlier, with its valuation remaining above its 10-year average. Burry has consistently expressed a bearish outlook on the AI industry, previously calling it a bubble and holding put options on Nvidia and Palantir. Credit rating agency Fitch also warned that the global credit backdrop is increasingly vulnerable to an AI market correction due to the scale of investment.
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