On Monday, “Big Short” investor Michael Burry, known for his high-profile bet against the U.S. housing market, said that today’s artificial intelligence surge, led by Nvidia Corp (NASDAQ:NVDA), could follow a boom-and-bust pattern similar to the 1920s radio craze.
Burry over the weekend drew parallels between the current AI frenzy and the speculative surge around Radio Corporation of America nearly a century ago.
“In the 1920s there was radio mania focused mostly on one stock, RCA,” Burry wrote on X.
He noted the company’s shares plunged roughly 98% during the early 1930s — even though radio technology continued expanding for decades.
“Even if you predicted a half century of radio dominance, you would have lost money on RCA,” he added, tagging Nvidia.
In the 1920s there was radio mania focused mostly on one stock, RCA. The stock fell peak to trough about 98% during early 1930s, and yet radio’s growth never slowed for many more decades. Even if you predicted a half century of radio dominance, you would have lost money on RCA.…
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In the 1920s, RCA’s stock price surged roughly 200-fold — one of the most dramatic run-ups in market history.
But after peaking in 1929, the shares unraveled, plunging from 114.75 in September 1929 to 2.625 by May 1932 — a staggering 98% drop, noted Finaeon, formerly Global Financial Data.
Over time, RCA clawed its way back, eventually surpassing its 1929 high. Following a 3-for-1 stock split, the shares traded at 66 before the company was ultimately acquired by General Electric in 1986.
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Earlier in the day, Burry also questioned whether massive AI-related capital expenditures can continue without hurting corporate balance sheets.
He called out companies including Microsoft Corp (NASDAQ:MSFT), Meta Platforms, Inc. (NASDAQ:META), Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) and Amazon.com, Inc. (NASDAQ:AMZN), asking, “When does the spending for AI data center buildout actually end?”
