Tech companies may be overestimating the useful life of chips, says Michael Burry. AI growth has led to heavy investments in infrastructure, boosting valuations. Nvidia’s sales are soaring, but longer chip lifespans could lead to more frequent upgrades. Investors may need to reconsider exposure to AI stocks amidst concerns of a bubble forming.

If Burry’s predictions are accurate, it could spell trouble for the tech sector. An AI bubble may already be forming, putting stocks at risk of correction. Consider diversifying investments or moving into ETFs/indexes to mitigate risk. Nvidia may be a safer bet, but softness in AI demand could impact related stocks.

Stock Advisor’s top 10 stocks don’t include Nvidia. Past recommendations have yielded significant returns. Consider joining Stock Advisor for the latest picks. David Jagielski, CPA, has no position in mentioned stocks. The Motley Fool discloses its positions.

Read more at Nasdaq: Michael Burry Thinks AI Companies Are Overestimating the Useful Life of Chips. Here’s Why That Could Be a Big Problem