Michael Burry Trims Oracle Short Bet, Citing Profits and Refuting Exit Reports

Investor Michael Burry has taken profits on his bearish bet against Oracle (NYSE: ORCL) but pushed back against reports that he had fully exited the position, labeling the claims "fake news." In a social media post on X, Burry stated he "covered half because winning," clarifying that he maintains a significant short position against the software giant.

Trimming a Winning Trade

Burry elaborated on his decision in a Substack post, explaining that he sold half of his Oracle January 2027 put options because the position had grown "too big." He noted that he does not "fall in love with options trades that go well" and was taking a disciplined approach to risk management. "I maintained short exposure here by retaining half," Burry wrote, confirming his continued bearish outlook.

The clarification came after media reports on July 18 suggested his six-month campaign against the company had ended. Oracle's stock has been under pressure, hitting a new 52-week low of $121.50 on July 18. The price represents a decline of roughly 63% from its all-time high of $345.72.

Bear Thesis Gains Institutional Support

Burry's short thesis, first disclosed in January 2026, centers on what he views as Oracle's aggressive AI infrastructure spending, questionable financing, and high customer concentration with OpenAI. This view recently received institutional validation when S&P Global Ratings cut Oracle's credit rating to BBB- on July 9, just one notch above junk status.

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S&P cited extreme concentration risk, noting that OpenAI accounts for about half of Oracle's $638 billion backlog. The ratings agency also highlighted a projected free cash flow deficit of $42 billion in fiscal 2027, crystallizing Burry's concerns into a significant balance sheet risk for the company.

Market Outlook and Retail Divergence

Looking ahead, Oracle has disclosed plans for a $20 billion equity issuance later in 2026, a move that would dilute existing shareholders at a price far below previous highs and could add further pressure to the stock. The combination of the credit downgrade and potential dilution may benefit the remaining half of Burry's put options.

Interestingly, retail trader sentiment appears to diverge from Burry's position. Following his clarification, data from Stocktwits tracked by Yahoo Finance showed sentiment on ORCL as "extremely bullish" amid high message volume. This suggests many retail investors interpreted the partial profit-taking as a positive signal, despite Burry's explicitly maintained short exposure.