Michael Burry Says We're In Another Bubble
Summary
Joseph addresses the current market skepticism regarding the $600 billion in capital expenditures (CapEx) planned by major tech hyperscalers. He contrasts the current environment with the 2000 dot-com bubble, noting that today's leaders like Google, Meta, Amazon, and Microsoft are the most profitable institutions in history with annuity-like income streams, unlike the cyclical hardware companies of the past. Joseph believes the market is mispricing these stocks due to short-term concerns over free cash flow, which is being temporarily suppressed by heavy investment in AI infrastructure.
Joseph's thesis is that these investments are not speculative but are driven by immediate demand and are already resulting in revenue acceleration. He highlights that while 'bears' fear these companies are becoming low-margin utilities, their organic net income continues to grow. He specifically identifies Meta, Amazon, and Microsoft as being 'on sale' compared to historical averages and even compared to traditional 'safe' stocks like Walmart or Costco.
Mentioned Stocks
Reasoning: Joseph is buying Amazon 'left and right.' He argues the valuation on an operating cash flow basis is at multi-year lows. He emphasizes that Amazon's $244 billion backlog (up 37% year-over-year) proves that the massive CapEx spending is meeting real customer demand.
Reasoning: Joseph is aggressively buying Meta, adding $10,000 today. He notes that the valuation is at historical lows (except for the 2022 anomaly) while revenue growth is accelerating significantly (22% last quarter). He recently sold Equifax and Salesforce to increase his Meta position.
Reasoning: Joseph considers Microsoft very cheap, trading at a 19-22x PE ratio. He finds it remarkable that Microsoft is currently cheaper than IBM, Walmart, and Costco, despite its superior growth profile and AI monetization potential.
Reasoning: Joseph owns Google but does not consider it a buy today because the stock has doubled and the valuation has expanded. He believes it is now fairly valued compared to the other big tech companies he is currently purchasing.