TLDR
- Michael Burry owns put options against Oracle stock and shorted shares in the last six months
- Oracle stock dropped 40% from September peak after concerns about debt and capital spending
- The company holds $95 billion in debt from data center expansion for cloud services
- Burry called Oracle’s strategy unnecessary and questioned if ego drives the decisions
- He prefers shorting Oracle over Meta, Alphabet, and Microsoft due to lack of diverse revenue
Michael Burry disclosed he’s betting against Oracle through put options. The Big Short investor made the announcement in a Friday Substack post.
Burry also confirmed he directly shorted Oracle shares during the past six months. He previously revealed bearish bets against Nvidia and Palantir in November.
The investor expressed strong criticism of Oracle’s current strategy. “I do not like how it is positioned or the investments it is making,” Burry wrote.
He questioned why Oracle is pursuing its current path. “Maybe ego,” he added.
Oracle has been expanding aggressively into cloud computing. This requires expensive data center infrastructure buildouts. The company is taking on substantial debt to fund these investments.
Oracle Stock Volatility
Oracle shares experienced dramatic swings in 2024. The stock surged 36% in one September session after bullish cloud forecasts tied to AI demand.
Those gains disappeared quickly. Investors worried about rising capital expenditures and growing debt loads.
Oracle finished the year about 40% below its September high. The company now carries roughly $95 billion in debt. This makes Oracle the largest corporate issuer outside financial firms in the Bloomberg high-grade index.
Burry didn’t disclose specific details about his position sizes.
Why Oracle Instead of Big Tech
Burry explained why he’s avoiding shorts on Meta, Alphabet, and Microsoft. These companies have diverse revenue streams beyond AI investments.
“If I short Meta, I’m also shorting its social media and advertising dominance,” Burry said. Similar logic applies to Google’s search business and Microsoft’s productivity software.
“These three will not go away,” Burry wrote. They can absorb AI losses while core businesses remain profitable.
Oracle lacks that diversification advantage. The cloud push represents a major strategic shift requiring massive capital.
Burry called Nvidia “the most concentrated way” to bet against AI. He noted it’s “the most loved, and least doubted,” making short positions cheaper.
He said he’d short OpenAI at a $500 billion valuation. This shows his skepticism about AI economics overall.
Oracle didn’t respond to comment requests outside business hours.
