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In 2008, Michael Bury saw something everyone else missed. He predicted the housing market crash and made billions while the rest of Wall Street burned. Today, the legendary investor, known for the film "The Price Is Right," is sounding the alarm again. He is officially playing against the most unstoppable force in today's stock market— artificial intelligence.
But he doesn't just open a short position on a broad index. In August 2026, Bury opened a highly concentrated multi-million dollar short position against Oracle, one of the most prominent tech giants aggressively refocusing on cloud AI infrastructure. Bury's warning sounds downright terrifying. He believes that we are experiencing the final months of a speculative bubble, which is equal in scale to the dot-com crash of 1999 .
More importantly, he accuses companies like Oracle of using aggressive accounting methods to inflate AI profits while hiding the grim reality of cash burn and rapid equipment depreciation. Today we'll break down the exact mechanics of Michael Bury's huge bet against Oracle. We take a look at Oracle's new fiscal year 2027 financials, expose the hidden risks of the AI infrastructure war, and find out if Bury is about to pull off the deal of the decade or if he's standing in the way of a runaway train .
If you own shares in AI or semiconductor companies , you should hear this. During fiscal year 2026, Oracle laid the groundwork for one of the most aggressive and risky business turnarounds in modern technology history. They are actively transitioning from a slow-growth company specializing in legacy database software to a hyper-growth AI cloud infrastructure giant.
When they released their latest financial results for the first quarter of fiscal 2027 in September 2026, Oracle looked like an unstoppable locomotive . The company reported a significant revenue increase of $19.35 billion, an incredible 30% year-over-year increase . The real star was Oracle's Cloud Infrastructure division, which showed explosive growth of 121% year over year, reaching $7.4 billion in one quarter.
Management confidently stated that their contractual obligations, that is, their portfolio of future revenues, had grown to a record $664 billion . This included over $30 billion in new cloud AI contracts signed in just 3 months. At first glance, Oracle seems to be flawlessly capturing the enterprise AI market, deepening its partnership with Google Cloud and securing multibillion-dollar defense contracts.
So why is Michael Bury massively betting on Oracle shares falling in the $144 to $152 range? The answer lies in the staggering amount of cash Oracle is burning to achieve this growth and the hidden fragility of their balance sheet. To support this huge order book, Oracle must physically build data centers, buy land, provide electricity, and procure GPUs.
In the last quarter alone, Oracle spent a staggering $28.5 billion on capital expenditures . Think about it. They spent almost $30 billion on physical infrastructure in 3 months. Because of these astronomical expenses, Oracle's free cash flow became deeply negative, losing about $5 billion per quarter.
To plug this huge hole and continue to fund its data center ambitions, Oracle resorted to debt and share dilution. Using a staggering $20 billion in capital raising, Bury looks at this huge “ money-burning furnace” and applies his amortization thesis. If Oracle is aggressively extending the useful lives of these GPUs worth tens of billions of dollars on its balance sheet, then their current profitability figures are a complete mirage.
Bury estimates that for large AI infrastructure players, profits could be overstated by 26-27% by 2028. Furthermore, this transition has a brutal human cost. To free up capital for servers and GPUs, Oracle is ruthlessly cutting staff, laying off about 21,000 employees in the last year alone. They are sacrificing their legacy businesses and employees to feed the AI machine.
Bury's main bet is to warn of AI overcapacity by 2028. Oracle is currently entering into large, multi-year cloud contracts. But what happens if end- user demand for AI software doesn’t materialize on the expected scale ? What if companies realize that renting AI computing doesn't actually generate enough revenue to justify such skyrocketing costs?
If demand decreases even slightly , the music will die down. Oracle will be left with a mountain of debt, an inflated stock price, and tens of billions of dollars in data centers that are rapidly depreciating and no longer economically viable. Cracks are already appearing in the foundation : Wall Street reports point to serious execution risks, including delays in data center construction in New Mexico and the Middle East .
Bury sees a company whose price reflects excellence, trading at peak multiples while hiding huge off-balance sheet liabilities and inflated accounting profits. Ultimately, the battle over Oracle perfectly encapsulates the biggest debate in the stock market today. On one hand, you have the momentum-oriented optimists who see Oracle's $664 billion order book and 121% growth in cloud services as irrefutable proof that the AI supercycle is a reality.
It is stable and just beginning. Wall Street analysts are aggressively raising price targets, arguing that Oracle's massive capital spending is just the ticket to becoming the dominant hyperscaler in the next industrial revolution. When the stock soared above $160 after the latest earnings report, it looked like a complete vindication of Oracle's aggressive strategy.
But on the other side is Michael Bury, the legendary contrarian investor who has built a career on uncovering the hidden rot within euphoric markets. He does not claim that artificial intelligence is just a fad. He argues that the economics of current infrastructure development are fundamentally flawed .
Bury sees a company aggressively stretching the boundaries of accounting rules to hide the true value of its data centers, using leverage to the limit and diluting shareholder equity to fund a cash-burning machine. If Bury is right, the massive collapse in the cost of these GPUs will eventually catch up with Oracle, wiping out their profits just as the market realizes that the supply of AI hardware far exceeds demand.
If you are currently investing in Oracle or any AI semiconductor maker stock, you should ask yourself a very difficult question. Are these companies building the railways of the future? Doomed to generate decades of stable cash flow, or are they engaged in a debt arms race that will end in a catastrophic decline in equipment prices?
Michael Bury made his bet, and history shows that ignoring his warnings can be a very costly mistake. What do you think about this ? Will Michael Bury be proven right again, or will his short position in Oracle be crushed by the unstoppable momentum of the AI revolution? Let us know your thoughts in the comments below.
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