Michael Burry has spent 2026 betting against AI. He shorted Nvidia. He shorted Palantir.
He called Oracle, Nebius, and Caterpillar overpriced too. By his own count, these bets made up more than 21% of his portfolio.
Then, on September 4, his biggest headline wasn’t about a chip stock. It was about leggings.
The AI bet is still there. It’s just not the story right now
Burry hasn’t closed any of his AI shorts. He kept adding to them through a rough August. Palantir jumped 51% that month. Nvidia rose 8%. Micron gained over 13%. All of it moved against him. He didn’t back down.
But the spotlight shifted. Lululemon stock fell 17% after weak earnings. It dropped below $100 for the first time since 2018. Burry called it “the trickster” in his portfolio. He said it’s now his single largest position. He plans to buy more if it stays under $100.
For a few days, the man known for shorting AI became the man betting on yoga pants.
Same investor, opposite bets
These two trades aren’t as different as they look. Both come from the same idea: prices can drift far from what a business is actually worth. The AI short bets that hype has pushed prices too high. The Lululemon bet is the mirror image he thinks fear has pushed the price too low.
Lululemon still has no debt. Its profit margins are strong. A new CEO starts this month. Burry sees a company with real problems, but not broken ones.
Good timing, or just his style?
Burry made this call the same week Wall Street turned sharply bearish on Lululemon. JPMorgan cut its price target to $95. Morgan Stanley cut to $83. Wells Fargo said it saw no strong case left for the stock.
Burry published his biggest bet the day everyone else gave up. That’s either great timing or simply how he’s always worked. He built his name buying when nobody else would.
No way to check his math
Here’s the catch. Burry closed his hedge fund, Scion Asset Management, in November 2025. He no longer files reports with the SEC. So there’s no official record of either bet the AI short or the Lululemon long. Everything comes from what he chooses to post on his newsletter.
Whether the AI bear is right about leggings is something only time will tell. And this time, there’s no filing to check his work.
Why Lululemon, why now — my take
Here’s the thing about Burry. He doesn’t buy hype, he buys panic. That’s always been the move. Everyone’s running from LULU right now, and that’s exactly when he shows up.
No debt. Strong margins. The business isn’t broken, it just needs fixing that’s the whole bet. He’s not betting the brand is dead, he’s betting the market overreacted.
And this isn’t him waking up one day and picking a random stock. He’s been talking about Lululemon’s management screwing up for months, way before the crash. So when the price finally dropped, he wasn’t scrambling for a thesis. He already had one sitting there. He just pulled the trigger.
That’s the part people miss when they call this a “surprise” pivot. It’s not surprise. It’s patience.
