Michael Burry Doubles Down On Nasdaq 100 Puts, Adds To Semiconductor Shorts As Nvidia Faces Scrutiny

(MENAFN- AsiaNet News)

• He also bought back 25% of a previously reduced put position in the VanEck Semiconductor ETF (SMH) expiring in June.
• On the SMH, where Nvidia is the largest holding, he said valuations“still have a ways to fall” and that he expects earnings to decline over the next couple of years.
• Burry also reiterated his long-standing opinion that standard accounting earnings for technology companies make them look more profitable than they really are for existing shareholders.

'The Big Short' investor Michael Burry has increased short positions in a key semiconductor ETF and the benchmark technology stock index, amid a selloff in AI infrastructure stocks on Jensen Huang's exit as CEO of Nvidia (NVDA) amid regulatory scrutiny.

In a Substack post on Thursday, the investor wrote that he used a bounce in the Nasdaq 100 off the 27,000 level to“doubled my put position in the NASDAQ 100 (NDX) at an early 2027 strike approximately 20% out of the money.” He also bought back 25% of a previously reduced put position in the VanEck Semiconductor ETF (SMH) expiring in June.

Nvidia Ecosystem And Semiconductor Shorts

Burry said that Nvidia-linked AI infrastructure and semiconductor stocks such as Nebius, TSMC, ASML, and CoreWeave had“benefitted greatly from Nvidia's market power and largesse, which seems to have entered a new paradigm now.” He is watching for signs that“NVIDIA's power is significantly lessened,” while highlighting Broadcom and AMD as potential beneficiaries of the fall in Nvidia.

On the SMH, where Nvidia is the largest holding, he said valuations“still have a ways to fall” and that he expects earnings to decline over the next couple of years. He added that he prefers the SMH for short positions over the iShares Semiconductor ETF, given its top holdings are AMD and Broadcom.

“A decent but not great alternative (SOXX) at the moment. I stick with SMH,” Burry said about his choice.

Nasdaq 100 Puts And Earnings Quality

Hyperscaler companies, Burry argued, could gain more negotiating leverage and benefit from longer data-center delays“under Democrat rule” after the mid-term elections. The rise in these stocks has helped Nasdaq 100 offset the weakness in Nvidia as of Thursday, he noted, allowing the bounce off the 27,000 area that helped his latest trade decision.

Burry also reiterated his long-standing opinion that standard accounting earnings for technology companies make them look more profitable than they really are for existing shareholders.”We must not forget that beyond the scandal, tech earnings are not what they seem,” he wrote.

How Did Retail Traders React?

On Stocktwits, retail sentiment around SMH fell from 'bullish' to 'neutral' territory over the past 24 hours, while message volume stayed at 'high' levels.

Meanwhile, sentiment around NDX improved from 'extremely bearish' to 'bearish' territory, with 'high' levels of retail chatter.

A Stocktwits user said that they are adding puts on Nvidia as it's“hard to see a bullish catalyst here until the dust settles.”

View this Stocktwits post

While SMH has gained 39% year-to-date, NDX has added 12%. 

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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