Michael Burry of “The Big Short” in 2010.
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Michael Burry detail his strategy as he continues to bet against the AI trade.
He’s still shorting the market’s hottest investment theme, but the bearish bet has evolved.
His short position is now mostly puts on the Nasdaq 100 and the VanEck Semiconductor ETF.
Michael Burry has long been bearish on AI, and his latest big short is evolving as the trade continues to prop up the stock market .
Burry, famous for betting against the US housing ahead of the 2008 crash, earlier this year revealed short positions on winning stocks like Nvidia and Palantir. On October 11, he detailed how the bearish bet has evolved lately.
“I had previously rolled my short positions into options positions,” Burry wrote on his a Substack, unpacking his thesis under a section title “Consolidating the Big Short.” “Now I have rolled most of my options positions into two index short – puts on the NDX and puts on the Van Eck Semiconductor ETF ( SMH ).”
Burry’s bearish bets against chip stocks over the summer likely paid off as the sector was pummeled by valuations concerns and other bearish headwinds. Now he’s focused solely on two broad baskets that track soaring AI stocks.
Burry said that he sees a “significant top” in the market sometime in the coming nine months, and that the final stretch of the bull run could be “wild,” with a potentially rapid run-up in prices before the pullback he’s eyeing.
The VanEck Semiconductor ETF “is a concentrated bet on the hottest and most overextended semiconductor stocks,” he wrote.
” Nvidia (NVDA) is 19.6% of the fund, with Taiwan Semiconductor (TSM) at 9.3%, Advanced Micro Devices (AMD) at 5.6%. Broadcom , Micron , Marvell and Applied Materials are all near 5% positions,” Burry. “This is very much in my wheel house of individual names I would like to be short.”
He also said that the bearish puts he’s purchased expire in June 2027, giving roughly eight months for his thesis to be proven correct.
Burry is still betting againt some names directly. He said he still owns puts on hot AI stocks inclduing Oracle and Palantir , as well as Met Life and Caterpillar .
“Volume continues to fall off as Palantir rallies, suggesting building exhaustion in the shares,” he said.
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