Remember that sinking feeling when everyone thought the housing market would climb forever, right up until it didn’t? One guy saw it coming from miles away and made a fortune betting against the bubble. That same investor is back in the headlines today, stirring up fresh debate about one of the most polarizing stocks on the planet.
I’m talking, of course, about Michael Burry – the man immortalized in “The Big Short” – and his recent comments on Tesla. Just when speculation was running wild that he might be quietly positioning against the electric vehicle leader, he stepped in to set the record straight. No short position here, folks.
But that doesn’t mean he’s suddenly bullish. Far from it. His blunt assessment of Tesla’s valuation has investors scratching their heads, wondering what exactly this contrarian thinker sees on the horizon.
The Denial That Caught Everyone’s Attention
It all started with a simple exchange on social media. Someone directly asked Burry if he was betting against Tesla. His response was short and crystal clear: “I am not short.”
That might sound straightforward enough. Yet coming from someone with Burry’s track record, every word gets dissected. After all, this is the investor who famously predicted the subprime mortgage disaster when almost nobody else believed it was possible.
In my view, the timing of his denial feels particularly interesting. Tesla shares have been on an absolute tear lately, hitting fresh all-time highs amid excitement over future technologies and bold promises. Meanwhile, Burry has been vocal – unusually vocal for him – about what he sees as excessive optimism baked into the company’s market cap.
The market capitalization appears ridiculously overvalued.
That’s not a throwaway comment. It’s the kind of statement that makes traders pause and double-check their positions. And yet, despite repeating this view multiple times recently, including to his newsletter subscribers, Burry insists he’s not actively shorting the stock.
Why Speak Out Now?
Burry has never been one for constant media appearances or daily market commentary. He tends to go quiet for long stretches, then emerge with pointed observations that often prove prescient. So when he chooses to weigh in on a specific company, people listen.
Perhaps the most intriguing aspect here is the contrast. He’s clearly skeptical about Tesla’s current pricing – calling it “ridiculous” isn’t exactly subtle – but he’s not putting money behind a bearish bet. At least not that he’s willing to confirm.
This leaves room for plenty of interpretation. Is he warning investors about potential downside without wanting to take the risk himself? Does he see value elsewhere in the market? Or maybe he believes the overvaluation could persist longer than many expect?
- He repeats that the valuation looks extreme
- He denies having a short position
- He continues highlighting concerns about growth expectations
Whatever his exact reasoning, the combination sends a nuanced message rather than a simple bullish or bearish call.
Tesla’s Wild Ride Through 2025
To understand why Burry’s comments matter, it’s worth stepping back and looking at what Tesla has actually experienced this year. It’s been nothing short of a rollercoaster – the kind that leaves even seasoned investors feeling a bit queasy.
Early in the year, shares took a serious beating. Competition heated up dramatically, especially from overseas manufacturers offering compelling electric alternatives at lower prices. Add in some broader concerns about demand slowing in key markets, and suddenly the growth story didn’t look quite as unstoppable.
Then came the rebound. Big time. Excitement around emerging technologies, particularly autonomous driving capabilities and robotics, helped fuel a remarkable recovery. The stock powered to new record closing levels, rewarding those who held on through the turbulence.
By late December, Tesla found itself sitting on solid gains for the year – impressive considering how ugly things looked at certain points. But here’s where things get complicated heading into the new year.
The Delivery Numbers Tell a Different Story
While the stock price has been celebrating future potential, the actual vehicle delivery figures paint a more grounded picture. Recent estimates suggest Tesla could see deliveries decline year-over-year in 2025 – potentially marking back-to-back annual drops for the first time.
Think about that for a second. A company long celebrated for explosive growth might actually be looking at contraction in its core business of selling cars. That’s the kind of disconnect that tends to make value-focused investors like Burry raise an eyebrow.
The company’s own compiled analyst expectations point toward roughly 1.6 million vehicles delivered next year. That’s notably lower than 2024 numbers and well below what many were hoping for when the year began.
- Growth era: Consistent year-over-year increases that defined Tesla’s rise
- Transition period: Flattening and now potential declines in core deliveries
- Future bet: Market pricing in massive success from new initiatives
This shift from pure growth stock to something more complex is exactly where valuation debates get heated. The market seems willing to pay premium prices based on tomorrow’s promises rather than today’s reality.
Burry’s Broader Market Concerns
It’s also worth noting that Tesla isn’t the only target of Burry’s recent skepticism. He’s been vocal about practices across parts of the technology sector, particularly around how some companies account for artificial intelligence investments.
In essence, he’s questioning whether certain aggressive accounting approaches might be inflating reported benefits from the AI boom. When massive capital expenditures get treated in ways that boost current earnings, it naturally raises questions about sustainability.
These comments extend beyond any single company. They reflect a broader concern about market enthusiasm potentially outrunning fundamental reality – a theme that echoes Burry’s famous housing trade all those years ago.
Maybe that’s why his Tesla remarks resonate so strongly. They’re part of a larger narrative about whether certain corners of the market have become detached from traditional valuation metrics.
What Does “Not Short” Actually Mean?
Let’s dig into the specifics of Burry’s denial. When he says he’s not short Tesla, that specifically means he doesn’t have an active bet that would profit from declining share prices through borrowing and selling shares.
But not being short doesn’t automatically mean being long either. He could simply be sitting on the sidelines, holding cash, or focusing capital elsewhere. Many successful investors make their biggest returns not by constantly betting against things, but by patiently waiting for clearer opportunities.
There’s also the possibility that his public comments serve as something of a warning shot. By highlighting what he sees as extreme valuation without taking the short position himself, perhaps he’s suggesting the risk-reward setup isn’t compelling enough even for a noted contrarian.
In investing circles, that’s often more damning than an outright bearish call. It suggests the situation might be problematic, but not necessarily imminent collapse – more like slow-motion concern.
Historical Context Matters
Anyone following markets for a while knows Tesla has defied gravity many times before. Critics have called it overvalued for years – sometimes spectacularly so – only to watch shares continue climbing as new growth drivers emerged.
Energy storage, software margins, autonomous technology – each wave has provided fresh justification for higher multiples. The question now is whether the next wave will be sufficient to support current pricing, especially if core vehicle sales face headwinds.
Burry himself has been wrong before, like anyone. But his track record demands attention, particularly when he chooses to speak publicly about specific situations that concern him.
Looking Ahead to 2026
As we turn the page to a new year, Tesla investors face an interesting mix of challenges and opportunities. Delivery trends will be closely watched, along with progress on new initiatives that could potentially open massive markets.
Competition remains fierce, margins face pressure, and macroeconomic factors could influence electric vehicle adoption rates. Yet the company continues to hold significant advantages in brand strength, charging infrastructure, and technological leadership.
Burry’s comments add another layer to this complex picture. They remind us that even legendary investors approach today’s market with caution, highlighting disconnects between price and underlying business trends.
Whether that caution proves warranted remains to be seen. Markets can stay irrational longer than many expect, as the saying goes. But when someone who successfully navigated one of history’s biggest bubbles offers a pointed assessment, it’s probably worth paying attention.
In the end, perhaps the most valuable takeaway isn’t about any specific prediction. It’s about maintaining healthy skepticism amid widespread enthusiasm – a timeless investing principle that never goes out of style.
Whatever happens next with Tesla shares, one thing feels certain: debates about its proper valuation aren’t going away anytime soon. And investors like Michael Burry will keep watching closely from the sidelines, ready to act when – or if – the numbers finally align with opportunity.
