Michael Burry Shorts Oracle Stock

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•  10 Jan 2026
 

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Michael Burry is once again challenging market consensus, and this time his focus is on $ORCL. The investor best known for anticipating the 2008 financial crisis has disclosed a bearish position against Oracle, built through put options and a direct short accumulated over recent months. For traders and long-term investors searching for clarity in an AI-driven market, this move raises a clear question: is Oracle stock facing structural risk, or is this another case of a correct warning delivered too early?

Oracle has undergone a major transformation. Once viewed primarily as a stable enterprise software company, it is now positioning itself as a serious player in cloud computing and artificial intelligence infrastructure. The company is investing aggressively in data centers and high-performance systems to support AI workloads, including large cloud agreements connected to OpenAI. These investments are designed to capture long-term growth, but they also require enormous upfront capital. Oracle projected capital expenditures for fiscal 2026 are expected to approach $50 billion, while total debt has surpassed $100 billion and continues to increase.

This financial profile sits at the center of Burry concern. His thesis is not that AI demand is fake, but that the economics may not justify the pace and scale of Oracle spending. He argues that Oracle is extending the useful life of expensive computing assets beyond realistic levels, which can inflate reported profits and cloud growth figures in the short term. For investors who focus on fundamentals, this creates uncertainty about the true financial health of the business beneath the headline numbers.

Oracle stock performance over the past year reflects this tension. In late 2025, $ORCL surged sharply after earnings highlighted strong AI-related demand. Since then, the stock has fallen significantly as investor attention shifted toward rising debt, heavy capital expenditures, and execution risk. Even quarters that show profit growth have been met with skepticism when revenue slightly misses expectations or when future obligations grow faster than cash flow. This pattern matters for searchers trying to understand why Oracle stock is volatile despite strong AI narratives.

A key element that helps explain Burry position is comparison. He is not betting against companies like $MSFT, $GOOGL, or $META. These firms have dominant, highly profitable core businesses such as enterprise software, search, and digital advertising. They can afford to absorb periods of lower AI returns and adjust spending if conditions change. Oracle, by contrast, is more directly exposed. Its future growth story relies heavily on the success of its cloud and AI infrastructure investments, leaving less room for strategic retreat if returns disappoint.

Burry broader view of the AI sector also provides context. He has taken bearish positions on $NVDA and $PLTR, reflecting his belief that extreme optimism has pushed parts of the AI market beyond reasonable valuation. Across the industry, AI spending is concentrated among a small number of large buyers, including Microsoft and Amazon. If that demand slows or becomes more selective, infrastructure-heavy companies could face rapid margin pressure.

For investors searching for answers about whether the AI bubble will burst, history offers an important reminder. In the late 1990s, Federal Reserve Chair Alan Greenspan warned repeatedly about excessive valuations in technology stocks. He was right about the bubble, but the market continued rising for years before collapsing. Being early can be as costly as being wrong, especially when using short strategies or options.

This is why Burry short on Oracle should not be read as a simple sell signal. Short selling and put options are advanced tools that require precise timing and the ability to withstand losses. Many such positions fail before the underlying thesis plays out. Instead, his move serves as a signal to reassess risk, balance sheet strength, and long-term return on invested capital.

Oracle itself still has a path to success. Oracle Cloud Infrastructure continues to grow, partnerships with companies like $NVDA enhance its technical credibility, and sustained AI demand could eventually justify today’s spending. However, the combination of high debt, rising capital costs, and intense competition from Azure means execution must be near flawless.

Michael Burry position sharpens the core issue. How much of Oracle valuation is driven by proven cash flow, and how much depends on expectations about AI that may take years to materialize? The answer to that question will likely determine whether this short becomes another famous call or another lesson in market timing. If you want a clearer view of where $ORCL truly stands, it may be worth exploring the full analysis before making your next decision.

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