Despite a recent string of strong earnings reports from various major technology companies, Michael Burry has reiterated his belief that the stock market may soon face a "1987-style crash."
The famous trader has no doubts that the current boom is unsustainable and has led to a severe overvaluation of many well-known stocks. It is worth recalling that the "Black Monday" of 1987 was caused by a combination of concerns over excessive stock valuations and a loss of confidence in the US dollar.
In 2026, some of the world's largest companies are overvalued due to a lack of confirmed returns from the key investment of this era: artificial intelligence (AI).
Meanwhile, recent trends among central banks to accumulate gold indicate that confidence in the US dollar is waning again, even if a full-blown de-dollarization crisis has not yet unfolded.
Reflecting on the current situation, Burry published a post in which he wrote that "there is indeed gold in them thar hills," but warned of the "ghost towns" left behind after a gold rush.
It's not only Michael Burry who is pessimistic about the state of the tech industry in 2026. Surging capital expenditures have reduced the free cash flow of traditionally cash-rich tech giants and raised concerns about their ability to continue financing construction.
Expert Ed Zitron has calculated that just two companies—OpenAI and the creators of Claude—account for over half the demand for data centers, meaning that due to questionable paths to profitability, they represent a systemic risk.
Reports of issues in private credit markets, particularly Google's decision to raise funds through an equity fund for the first time in decades, indirectly increase the likelihood of a crash, and a sudden one at that.
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