Michael Burry, famed for his role in "The Big Short," is maintaining his bearish bets even as the S&P 500 surges to record highs, warning that the current rally could still end in a sharp selloff reminiscent of the 1987 stock market crash.

"I still believe we may be approaching a major top, possibly even a 1987-style crash, but the S&P 500 hitting new highs could attract new money into the market," Burry wrote in a Substack post on Tuesday. The S&P 500 rose 1.9% on Tuesday, closing at its first record high since June, boosted by better-than-expected corporate earnings and a further decline in oil prices amid rising hopes for the reopening of shipping lanes in the Strait of Hormuz.

The tech-heavy Nasdaq Composite surged 2.7%, gaining nearly 5% in just the first two trading days of the week. Burry has been one of Wall Street's most vocal skeptics of the artificial intelligence boom, arguing that demand for AI infrastructure is being driven by financing arrangements that may not be sustainable. He stated that the market's rise is creating a self-reinforcing cycle, where declining volatility encourages systematic investors to increase their exposure.

"Remember, the market rises as volatility falls, forcing volatility-targeting funds to increase leverage and drawing in leveraged capital from other momentum strategies," he wrote. Facing the rally, Burry said he continues to hold short positions in the iShares Semiconductor ETF (SOXX), Micron, Nvidia, Caterpillar, Palantir, Tesla, and Applied Materials. The investor noted that he remains confident in the long-term outlook for these positions but added that he would exit them if the trades move significantly against him. He indicated that all of his positions, except the short bet against Nvidia, are currently profitable.

"Again, short selling is not for everyone," Burry wrote. "I have to short. Most people should not try it."