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The man who called the 2008 housing crash just bet big against one of the hottest stocks of the entire AI boom. Michael Bur aka the mastermind investor from the big short just disclosed that he's actually shorting Micron. Yes, he's betting that it's going to fall. So, why would a world famous contrarian step in front of a freight train like Micron?
I want to show you exactly what he is seeing and why. And then I'm going to finish with two AI stocks that could actually be a far calmer way to play the AI theme. So, make sure you stick around for those. Hi, I'm Jacob Wade. I'm a financial coach that helps high earners retire early. And if you like timely financial news videos just like this one, make sure you hit the thumbs up button below.
It lets me know to keep making more videos just like this. Now, let's just be real here. Micron is not a broken company in any way, shape, or form. As of the week that I'm recording this, it's actually up more than 160% in the past 3 months alone and up around 700% in the last 12 months. It's one of the best performing stocks in the entire market.
So what the heck is Bur thinking betting against it? It comes down to one word cycles. Now Micron makes memory chips. Memory has always been a boom and bust business. So what happens is demand runs really hot. Then the prices spike, profits explode, and then supply actually starts to catch up and the prices crash and the stock gets cut in half.
Now, Bur noted that Micron has been through 34 major draw downs. And by major, he meant 30% or more in the past 42 years. And when he placed his bet, the stock was further above its long-term average price than any time since 1984. So, here's his read. He thinks we could be near the top of this cycle.
And it's not just Micron. He's betting against other big AI names like Nvidia and Applied Materials also. So, he's even shorted the iShare Semiconductor ETF, SMH. He's even shorted the entire Eyesshare Semiconductor ETF itself. But here's the other side, because honestly, plenty of smart people think he's wrong.
Micron just posted record earnings. It's locked in long-term contracts covering about half of its revenue, which could smooth out those brutal cycles that it's used to. And on the Wall Street Zen platform, 25 of the 27 analysts covering Micron still recommend the stock as a buy or even a strong buy.
So this fight is far from settled. And Bur is famous for being right, but he's also famous for being super early, sometimes by years. Now, here's the part that ties back to Bur. Days before this news spread, our own editor-inchief, Steve Wrightmeister, was issuing his own alerts on this very stock. Now, this would be a good time to remind you that this video should not be considered personalized investment advice or recommendation to buy or sell any security.
Now, Micron is truly a unique case because in Wall Street Zen's rating system, which scores thousands of stocks from A down to F, it still rates Micron as an A as a strong buy recommendation. The system is not really screening any danger here. But if you look closer at the component grades, which are seven individual grades that inform the overall rating, you'll see that the company actually earns a D rating for safety, which is worth noting.
And also worth noting, again, Steve Rightmeister, our editor-inchief, he also runs our Zen Investor stockpicking newsletter. He noticed that Micron had dropped more than 20% from its high in just two trading sessions, and it hit his trigger price. So, he decided to lock in the gain rather than fight the tape, as it were.
So, could the stock still go up? Yes. But as they say, you don't go broke taking profits. Sometimes it's okay to leave the party too early rather than too late. And this position was exited at a very impressive gain. So the simple lesson here is yes, Micron still has a lot going for it. The A from the Zen ratings tells you that Micron is still a quality company.
However, that's not a promise of a smooth ride from here. So make sure you tread carefully. And by the way, if you want to hear more of Steve Rymeister's commentary live, don't miss his live weekly training sessions. They happen every Monday at 7 PM Eastern time. So you could sign up for the next one at wall streetzen.com/live or just scan the QR code on the screen right here and sign up.
They're completely free, but you do got to register to join. So if the hottest chips are getting stretched, what could you do instead? So, I went looking for AI related names that are still rated highly by the system that the crowd really hasn't bid to the moon yet. And really, two stood out here. And again, to be clear, nobody is saying these are the next Micron.
They're just quality companies that in their own right could offer a calmer way to stay in the AI investing theme. So, first up is Science Applications International, ticker symbol S AIC. Now, science applications builds and runs advanced technology systems for US government agencies. We're talking defense, space, intelligence, and yes, real work in the quantum computing space as well.
Because those are long government contracts, they've booked a backlog of roughly $23 billion in future business against only about 7 billion in revenue a year. That's rare visibility into what's coming in the future. And so this isn't really a bet on quantum computing someday. It's a profitable company that's already getting paid for the work.
And even better, they've been beating estimates. And that's an understatement to be honest. They've been blowing them out of the water the past four consecutive quarters. And here's where the data comes in. SIC carries a Zen rating of an A, a strong buy, and is in the top 4% of every stock the system tracks.
The overall grade breaks down into seven different component grades, and SIC's stack up well. It's in the top 17% for sentiment, the top 16% for financials, and the top 13% on the AI factor. But better still, it's actually in the top 6% for safety, and the standout one here is value, where it lands in the top 1% of the entire market.
Now, the growth and momentum factors are the softer spots here, which fits a steady government contractor rather than a hot grower. So, this one has steady growth, but it's not explosive. But again, if you put this all together, the picture is pretty clear. This is a durable, low drama business trading genuinely cheap for what it is.
So, the bottom line here on SIC, it's steady reward with a lot of risk stripped out of it. Now, quick ask before we talk about the next stock here. If you're getting value from this, just hit the subscribe button below. I break down the market like this every single week. If you don't want to miss a video, subscribe and make sure you hit that notification bell so you're always notified of when we post new videos.
Uh, the second stock here is 8 by8, ticker symbol EGHT. Now, 8 by8 runs cloud communications for businesses. We're talking phone, video, contact center software all over the internet. And for years, honestly, the market rode it off fearing that AI chat bots would make this technology obsolete. But instead, AI became its fastest growing business.
And the company just delivered its first GAP profitable full year since 2015. And last quarter, it beat earnings estimates by more than a third, making that the seventh consecutive quarter of outperforming estimates. And honestly, barely anyone's watching this stock. There's just one analyst that covers it, but happens to be a name in the top 6% for stock picking and gives it a strong buy recommendation.
That's an opportunity in a stock that honestly the crowd hasn't found yet. Now, I'll give an honest note here. This is a smaller company, so expect a bit more price movement dayto-day. But the bottom line, the market called 8 by8 an AI casualty, but the data says AI winner hiding in plain sight. Now, here's the actual data.
8 by8 is a strong buy, an A in Zen ratings, landing in the top 1% of the entire market, and it's the number one rated stock out of 175 in its own industry. Walk the components and you'll see why. It's in the top 23% for financials, the top 19% on the AI factor, and the top 18% for safety. Growth lands in the top 9%.
And the two that really pop here are sentiment, which is in the top 3%, and value in the top 1% of the entire market. I will say the one soft spot here is momentum, which is what you'd expect from a beaten down name that really people haven't found out about yet and haven't come back to. So honestly, 8 by8 is a cheap, profitable, top rated company, and smart money is starting to pile in.
So while the crowd, white knuckles, the memory chip roller coaster, these two could keep you in the AI game with a lot less drama. And Zen ratings that we talked about here, those update daily. So you can pull a free rating on over 4600 stocks yourself. You just type in a ticker symbol at wall streetzen.com and bookmark the site so you can always see updates on it.
And one more thing, every Monday at 700 p.m. Eastern time, like we talked about, Steve Wrightmeister does host a live training with his updated market outlook, a trading plan to beat the market, and his trade of the week, and much more. So, it's free, but you do need to register. You can again scan the QR code on the screen right here, or just go to wall streetzen.com/live.
And you can join us in our next one, Monday at 700 p.m. Eastern time. All right, so Bur is betting the memory cycle is starting to top out. The Bulls say that he's early again, but I'd love to know what you think. Is he right? Is he nailed it? Or is he too early in his call for the top? And what other AI names are you watching that maybe I didn't mention here?
Drop them in the comments below. We read every single one. Now, if you're wondering which AI stocks could actually survive a downturn here, go watch the video that's popping up on your screen right now for more details.
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