Cramer Says If You Are Shorting Micron You Are “Digging Your Own Grave” After Michael Burry Announces New Bet Against Company
Jim Cramer and Michael Burry rarely agree on anything, but their clash over Micron has turned into a very public, very high-stakes argument about whether the AI bubble pops before June 2027.
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Two of the most-watched names in retail investing are on opposite sides of Micron Technology (NASDAQ:MU | MU Price Prediction) this week. Michael Burry told readers on September 28, 2026 that put options had replaced his short positions. His Micron puts expire in June 2027 at a strike of roughly $500. Jim Cramer took the other side on two straight nights. He said anyone shorting Micron ahead of an aggressive December buyback is “digging their own grave.” Cramer did not name Burry.
What Burry Needs From Here
A put gains value when a stock falls below its strike price. Micron trades near $1,097.20, so Burry’s position needs the stock to lose about half its value by expiration. Burry wrote that “the bubble in AI may burst sooner than later” and added, “I am moving timelines up. As such, I want more leverage.” Options traders are leaning his way on that expiry. The put/call ratio for the June 17, 2027 contracts stands at 4.21, compared with 0.63 across the full chain.
Cramer’s Lunch With Micron’s CEO
On CNBC on October 2, Cramer described a lunch where he told CEO Sanjay Mehrotra that Micron is “no longer a cyclical company” and is now “a secular growth company.” According to Cramer, Mehrotra said that “with the six multiple, it doesn’t make sense.” Micron trades at about 7 times forward earnings, with an analyst target of $1,533.80.
Results That Make Shorting Expensive
Micron’s fiscal fourth-quarter earnings release showed revenue of $54.23 billion against estimates of $50.97 billion. Non-GAAP EPS of $33.42 beat the $31.35 estimate and was up 1,002% year over year. Gross margin reached 87.0%, compared with 45.7% a year earlier. For fiscal Q1, management guided to $61.5 billion ± $1.5 billion in revenue and $38.15 ± $1.00 in EPS.
The secular argument rests on contracts. Micron now has 26 strategic customer agreements, up from 16 in August. More than 75% of 2027 output is already committed, and remaining performance obligations total about $150 billion. CFO Mark Murphy said, “Even at floor prices, we expect margins meaningfully above any prior cycle peak margins.” Mehrotra added, “We do not have line of sight to when supply and demand will return to balance.”
December Buyback Cramer Calls the Trap Door
Micron plans to step up capital returns starting December 9, 2026, the second anniversary of its CHIPS agreements. The company intends to return 100% of excess cash over time, mainly through buybacks. It ended the quarter with $68.3 billion in net cash, while the current authorization is only $2.2 billion, so management expects to seek more soon. Fiscal 2026 buybacks totaled $650 million. Filings and updates are posted on Micron’s investor relations site.
Why Cramer Points to Nucor
Cramer said Nucor Corporation (NYSE:NUE) is the only company he has seen make a similar shift, moving from cyclical steel to diversified brands and gaining a higher valuation. Nucor is up 80.07% over the past year and down 4.11% over the past month. It shipped a record 7.1 million tons from its steel mills in Q2, and management named data centers as a multi-year source of demand.
What Investors Should Track
Micron is up 503.34% over the past year and 284.67% year to date, the kind of run that gets dissected in our free playbook on spotting the next Nvidia-scale winner early. Even so, the stock’s reaction to the report was muted, as headlines focused on chip cycle and margin worries. The fiscal Q1 gross margin guide of approximately 86.25% is slightly below Q4, though management called Q1 the floor for fiscal 2027. Keep an eye on the size of the new buyback authorization and on HBM pricing for 2027. Burry’s case depends on that pricing breaking down before June.
Data Sources
- CNBC, October 2, 2026: Cramer’s lunch with Mehrotra, his secular growth framing and the Nucor comparison.
- Same source: the December buyback date Cramer cited.
Contact [email protected] for any questions or corrections.
AJ spent 10 years writing about financial markets at The Motley Fool. His coverage centers on technology stocks and the broader macroeconomic trends, from interest rates to geopolitics, that shape where markets are headed next. AJ is drawn to the stories where big-picture economics and individual companies collide.
