Investor Michael Burry warns that the Nasdaq 100 Index may experience a significant drop due to overvaluation of tech stocks.

Renowned investor Michael Burry warns that after experiencing a "parabolic" surge and reaching unsustainable heights in tech stock valuations, the Nasdaq 100 index faces a sharp reversal. Burry wrote on Substack that the current market situation is similar to the high point before the bursting of the internet bubble, specifically pointing out the recent sharp rise in chip stocks. Since the end of March, the Philadelphia Semiconductor index has risen nearly 70%. He stated that, according to his calculations, the price-to-earnings ratio of the Nasdaq 100 index is currently about 43 times, significantly higher than the "reasonable level" of around 30 times, because "Wall Street has overestimated the earnings of the fastest growing and highest valued companies by 50%". Burry said, "We are witnessing history. In the stock market, this is usually not a good thing." He compared the current situation to "the last few minutes before a bloody car crash". However, Burry advises against shorting stocks, as the cost of buying put options is high and it is easy to suffer losses due to poor timing.