Michael Burry Reduces Oracle Short Position but Keeps Bet Alive Amid Stock Slide

Michael Burry is keeping his foot on the gas with Oracle (ORCL), despite reports that he'd exited his bearish wager. On July 18, Burry took to X to squash rumors, clarifying he'd only trimmed half of his January 2027 put options. "This is fake news. I covered half because winning," he wrote, making it clear his bet against Oracle remains firmly in place.

The software giant's shares hit a fresh 52-week low at $121.50 that same day, a dramatic plunge from its all-time high near $346. That 63% drop has turned Burry's short position into one of the headline-making moves on Wall Street this year, given the sheer scale of the decline.

In more detail, Burry revealed on Substack that he scaled back because the position got too large to hold comfortably, not because he lost conviction. He was candid about avoiding attachment to winning option trades and emphasized he's kept half of his exposure intact, signaling ongoing skepticism about Oracle's near-term performance.

Burry initially lifted the curtain on his Oracle put options in early 2026 shortly after winding down his Scion Asset Management hedge fund. His bearish thesis pivots around Oracle's ramped-up AI infrastructure spending and risky customer concentration, especially its reliance on OpenAI. Institutional players have echoed these concerns: S&P Global recently downgraded Oracle's credit rating to BBB-, perilously close to junk status, highlighting OpenAI's outsized role in the company's $638 billion backlog and a predicted negative free cash flow of $42 billion in fiscal 2027.

The credit rating downgrade puts a spotlight on Oracle's financial pressures, transforming a qualitative red flag into a stark quantitative reality. Meanwhile, Burry's update seems to have sparked some confusion among retail traders. Data from Stocktwits, analyzed by Yahoo Finance, shows an "extremely bullish" sentiment spike on Oracle after his X post, despite Burry's sustained short stance-a fascinating divergence between his outlook and retail enthusiasm.

Burry's Oracle shorts aren't his only move. He's also holding puts on Nvidia and had already trimmed his Palantir short by mid-2026. Still, Oracle remains one of his most visible and, judging by the stock price plunge, his most lucrative plays so far.

Oracle isn't out of the woods yet. The company has flagged plans to issue $20 billion in new equity later this year, which risks diluting shareholders at current depressed prices far below last year's highs. Coupled with the lingering credit rating pressure, this could weigh heavily on the stock in coming quarters. If that scenario unfolds, the remaining half of Burry's puts will have some fresh runway to possibly run.

Oracle hasn't publicly addressed Burry's ongoing short position or the downgrade saga as it braces for its next earnings update, leaving plenty of room for speculation on how these factors will play out in the near term.