Oracle (ORCL) Stock: Burry Takes Short Position on Database Company

TLDR

• Michael Burry owns put options on Oracle and shorted the stock in recent months
• Oracle shares fell 40% from September peak after AI-driven cloud rally faded
• The company carries $95 billion debt from data center expansion efforts
• Burry questioned Oracle’s cloud strategy and suggested ego drives decisions
• He prefers shorting Oracle over diversified tech giants like Meta and Microsoft

Michael Burry revealed he’s betting against Oracle. The investor owns put options on Oracle shares and disclosed the position Friday.

Burry also shorted Oracle stock directly over the last six months. He shared this information in a Substack post after markets closed.

Oracle Corporation, ORCL

The Big Short investor previously disclosed bearish positions on Nvidia and Palantir in November. Now he’s targeting Oracle’s cloud expansion.

“I do not like how it is positioned or the investments it is making,” Burry wrote. He called the strategy unnecessary.

When asked why he chose Oracle, Burry suggested ego might be a factor. “Maybe ego,” he stated.

Oracle has pushed hard into cloud computing services. This requires expensive data center construction. The company is borrowing heavily to fund the buildout.

Oracle Stock Performance

Oracle shares had a wild ride in 2024. The stock jumped 36% in a single September session on bullish cloud forecasts.

The company signaled strong AI-related demand for its services. Investors initially embraced the growth story.

Those gains evaporated as reality set in. Capital expenditure concerns mounted. Questions arose about cloud deal structures.

The debt load became a focus point for investors. Oracle now holds about $95 billion in outstanding debt.

This makes Oracle the biggest corporate bond issuer outside financial companies. The stock finished 2024 roughly 40% below its September peak.

Burry didn’t share specific details about his put options or short position sizes.

Selective Short Strategy

Burry explained why he avoids shorting Meta, Alphabet, and Microsoft. These companies have strong businesses beyond AI.

“If I short Meta, I’m also shorting its social media and advertising dominance,” he said. The same logic applies to Google’s search engine and Microsoft’s productivity software.

These firms can weather AI losses while maintaining profitable core operations. “These three will not go away,” Burry noted.

Oracle doesn’t have that safety cushion. The cloud strategy represents a major bet requiring huge capital commitments.

Burry views Nvidia as the purest AI short. He called it “the most loved, and least doubted.”

This makes Nvidia puts relatively cheap compared to other bearish trades. Burry would even short OpenAI at a $500 billion valuation.

His comments reflect broader skepticism about AI spending and economics. Oracle didn’t respond to requests for comment outside regular business hours.