Key Takeaways
- Michael Burry expanded his holdings in MercadoLibre, Adobe, PayPal, Lululemon, and Zoetis through recent purchases.
- His MercadoLibre acquisition came in the mid-$1,500s, which he considers an attractive price for a quality long-term investment.
- Lululemon received a full-sized position from Burry, who sees significant value in the athletic apparel company.
- The legendary investor cautioned that current AI investment patterns resemble the dot-com bubble dynamics.
- Recent figures reveal 87% of VC funding is directed toward AI ventures, echoing 1999 technology investment trends.
Michael Burry, whose prescient housing market predictions were immortalized in The Big Short, has been accumulating shares in companies he views as underappreciated by today’s market. As capital floods into artificial intelligence ventures, Burry is moving in the opposite direction.
This Monday brought disclosure of Burry’s recent acquisitions spanning five distinct enterprises: MercadoLibre, Adobe, PayPal, Lululemon Athletica, and Zoetis.
Via a Substack post, he outlined his investment rationale, characterizing these equities as beneficiaries of a “mass whale fall” occurring outside the market’s primary focus.
Investment Selections and Strategic Thinking
Burry disclosed he expanded his MercadoLibre position at prices around the mid-$1,500 level. His assessment labels it a high-quality long-term opportunity available at a markdown due to international market exposure concerns.
Additional capital went into Adobe and PayPal positions, while Zoetis — operating in the animal healthcare sector — earned recognition as a “fat pitch” opportunity requiring a patient approach.
Perhaps his most notable action involved Lululemon, where he initiated what he termed a full-sized stake.
Burry’s investment philosophy here is clear: these securities are being neglected as market participants pursue AI opportunities.
Sounding the Alarm on Artificial Intelligence Speculation
Burry established a parallel to the late 1990s technology bubble. During that period, established companies and international equities were discarded as investment capital concentrated in internet and telecommunications ventures.
He referenced research from Apollo’s Chief Economist Torsten Slok demonstrating that 87% of venture capital dollars currently target AI-focused enterprises.
Companies with AI connections represent nearly 50% of investment-grade bond offerings and approximately 38% of high-yield debt issuance.
Burry highlighted that over $100 billion in investment-grade bonds issued during the 1999–2000 technology surge eventually suffered downgrades to junk status within several years.
His conclusion: the present environment constitutes an asset bubble.
The companies in Burry’s crosshairs have all retreated from peak valuations. Lululemon has experienced substantial declines throughout the past twelve months. Adobe confronts questions regarding its expansion trajectory. PayPal continues working to restore investor trust.
MercadoLibre, despite solid business fundamentals, faces headwinds from Latin American currency fluctuations and regional market dynamics.
Zoetis conducts business in animal healthcare, a sector insulated from technology investment cycles.
Burry’s investment hypothesis suggests that capital reallocation away from these companies — propelled by AI excitement — has generated attractive entry points.
His historical performance lends credibility to contrarian positions. His accurate forecast of the US housing market implosion preceding the 2008 financial crisis established his reputation.
Time will determine whether these selections deliver returns, but Burry’s disclosures have spotlighted a collection of stocks largely absent from recent market advances.
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