As Artificial Intelligence (AI)-related investments enter all financial markets, hedge fund managers. Michael Burry has also warned Wall Street of a possible dot-com bubble.
A well-known trader likened the ongoing market rally, fueled by AI need, until the last months of 1999-2000 boil. He also mentioned the strange history that the last time the New York Knick made the National Basketball Association (NBA) Finals was 1999.
Nine months later, the Nasdaq peaked and then fell 78% in the following months. With the Knicks back in the NBA Finals, he lighting fixtures that the latest trends reflect the dot-com bubble.
Burry cites several important reasons why Wall Street investors should be wary of potential dot-com events. For example, the Nasdaq rose 84% during the dot-com boom and is up 31% over the past 12 months. In addition, he reported that the technology sector made up 33% of the S&P 500 at dot-com bubblecompared to 32% today.
Meanwhile, the ratio of Cyclically Adjusted Price-to-Earnings (CAPE), which measures the value of the market in relation to the company’s income, hit 40x at the dot-com peak, and it is 40x again in 2026. Burry emphasized that the credit limit was at a high value before the dot-com collapse and is now at risk.
During the dot-com bubble, hedge funds held 31% of their assets, and in 2026, 33% was concentrated in a few big names. Also, he he realized that upcoming public offerings (IPOs) from Space Exploration Technologies Corp., Anthropic PBC, and Open Artificial Intelligence Inc. could raise as much as, or more than, the combined funding of nearly 300 Internet and technology, media, and telecommunications IPOs since 2000.
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