In recent years, a tale that captured the attention of many, especially within investment circles, has seen renewed relevance. This narrative was vividly brought to life in the acclaimed book “The Big Short,” which was later adapted into a cinematic production, garnering much public and critical acclaim. At the centre of this story stands Michael Burry, a figure of contrarian investment strategies whose audacious gamble against the market’s stability catapulted him into financial folklore. Burry’s perspective, firmly rooted in the belief of an impending market downturn unprecedented in scale, illuminated his foresight despite the market’s initial inertia.
It was approximately two years ago, in the year 2023, when Michael Burry took to the social media platform X, previously known as Twitter, dispensing a terse yet potent directive: “Sell.” The specifics of Burry’s insights at that juncture remained largely speculative, yet it echoed the prescience he exhibited during the great financial crisis. A déjà vu of sorts seemed to unfold, mirroring the multi-year anticipation that prefaced his earlier prediction.
Fast forward to the present, a variety of indicators have begun to signal a potential upheaval within the financial index. Revelations from consumer and business metrics, fluctuations within the housing market, and the escalating debt crisis within the United States necessitate a prudent analysis. As part of such diligence, an examination of Burry’s current investment undertakings can offer invaluable insights.
In particular, those who have maintained a bullish stance on the technology sector might need to recalibrate their expectations. This is especially pertinent concerning shares of NVIDIA, a company that has been at the forefront of the tech investment boom but might face challenges ahead.
The Recent Strategic Moves of Michael Burry
In a striking shift from his previous investment narratives, Michael Burry has recently redirected his focus, heralding significant changes in his portfolio. Notably, Burry has initiated a put option position on NVIDIA’s stock, the valuation of which surpasses $90 million. This move, however, is not as straightforward as conventional buying or shorting of stock. Put options involve a leverage and expiration factor, suggesting this $90 million venture could potentially escalate significantly in valuation.
Yet, inherent in this strategy is a considerable risk. Should NVIDIA’s stock not depreciate to a specified level within a designated timeframe, Burry stands to lose the entirety of his investment. While NVIDIA’s stock performance has exhibited resilience, its current valuation raises eyebrows among market analysts, with concerns magnified by the volatile trade tariffs instigated during Trump’s presidency. This turbulence directly influences the semiconductor industry, casting shadows over future earnings growth potential for NVIDIA and positioning it as a target for Burry’s speculative bet.
Beyond NVIDIA, Burry’s portfolio reflects a bearish sentiment towards Alibaba Group, a previous stalwart of his investment strategy. Burry has not only liquidated his Alibaba holdings but also placed a put option worth an estimated $26 million. Similar to the NVIDIA bet, this reflects a leveraged position with a critical timing element. While Alibaba continues to be seen as a robust company with promising growth trajectories, market conditions and geopolitical tensions have rendered Burry’s stance on NVIDIA untenable, thus extending his bearish outlook to encompass Chinese retail stocks more broadly.
The Precipitating Factors for Bearish Bets
Burry’s investment thesis extends to other significant put option positions targeting firms like JD.com Inc. and PDD Holdings Inc. This strategy correlates with the escalating costs burdening consumers and businesses importing goods from China.
This thesis was somewhat vindicated during the tail end of May 2025, when PDD Holdings disclosed its quarterly earnings. The data revealed a shortfall from the expected revenue and earnings benchmarks, marking a contraction from the previous year’s figures. This development, resulting in a nearly 15% drop in PDD’s stock in a single trading day, serves as a potential precursor to forthcoming reports from Alibaba and JD.com, indicating a broader economic trend.
Moreover, these e-commerce giants have a tethered relationship with the high-tech sector, including companies like NVIDIA. Reduced demand and the looming uncertainty fueled by ongoing tariff negotiations may likely stunt expansion efforts. This contraction in growth initiatives, in turn, suggests a prospective downturn in demand for semiconductor and chip technologies.
The Verdict on Michael Burry’s Strategy
Whether Michael Burry’s prognostications prove accurate remains a topic of active debate. However, given the ongoing critical earnings season where corporate guidance and bottom-line results are scrutinized more intensely due to tariff impacts, Burry’s investment philosophy will soon be tested. Investors and market watchers alike now have a closer vantage point to assess the implications of these investments, underscoring a fascinating phase in financial market dynamics that could shape investment strategies for years to come.
Most new investors are familiar with one story, which was made famous by the book “The Big Short” and eventually became a blockbuster movie. One of the main characters in this story is investor Michael Burry, a contrarian investor who bet the whole ranch on one single view that the entire market was going to crash like never before.
While he was a couple of years early, he was eventually proved right, not to mention he made a killing through it.
About two years ago, in 2023, Michael Burry sent a social media post on the X platform (formerly Twitter) with one clear message: “Sell.” While few people can point to what he might have seen back then to make him turn bearish, like in the great financial crisis once again, it seems that history is starting to repeat today, with the same multi-year mark since the call was made.
While some warning signs threaten the index today, whether it be from consumer and business data, housing, or mounting debt in the United States, investors would be better served by examining what Burry has in his portfolio today.
For better or for worse, those who remain bullish on the technology sector may see their party slow down in the coming months, especially in shares of NVIDIA (NASDAQ:).
What Michael Burry Has Done This Quarter
While this famous investor had been making new headlines due to his bullish portfolio, things have turned around aggressively in recent months. Burry has now opened a put option position for NVIDIA stock, which is reported to be worth just over $90 million, and there’s a major caveat to this position.
Options are not like outright buying or shorting a stock, as these instruments carry a leverage and expiration factor, meaning this $90 million bet could be worth north of a couple hundred million in reality.
Then there’s the timing aspect. Burry risks losing 100% of his investment if NVIDIA doesn’t decline by a certain amount and by a specific date.
While NVIDIA stock has proven resilient in its recent price performance, its current valuation remains a concern for some market participants. Furthermore, President Trump’s current trade tariff volatility has directly impacted this semiconductor business.
Future earnings growth may not be strong enough to justify NVIDIA’s valuation today, creating a downside gap that Michael Burry might be betting on.
Moving past NVIDIA, there is another bearish bet in the Burry portfolio that has also surprised many investors in the market.
Alibaba (NYSE:) Group was once Burry’s most prominent position. While that stock proved to be a profitable idea, he has decided to sell all of it and also open a put option position worth as much as $26 million.
Again, this is not a short stock position but a leveraged options bet with a timing aspect.
While Alibaba might still be a great company with strong growth prospects, Burry can’t justify investing in NVIDIA due to tariffs.
It is also a long bearish position and is just as exposed to the bearish sentiment in today’s market.
Extending his view on Chinese retail stocks took a lot more than just Alibaba down with it.
Consumer Slowdowns, Tariffs Justify More Bearish Bets
Another multi-million put option position has been reported for shares of JD.com Inc. as well as PDD Holdings Inc. This supplement to Alibaba’s position is directly tied to increased costs faced by consumers and businesses who import goods from China directly.
The Burry thesis is already being proven right, as during the last week of May 2025, PDD stock reported its latest quarterly earnings.
The results weren’t what the markets expected, as revenues and earnings missed expectations and contracted compared to the same quarter reported last year.
As a result, the stock was down by just under 15% in a single day, likely foreshadowing similar behavior from Alibaba and JD stock when those two companies report their earnings results this quarter.
The linkage in these E-commerce businesses can also be made back to NVIDIA in this macro bearish view.
With these high-tech businesses experiencing less demand and increased uncertainty in the coming months due to ongoing tariff negotiations, it would be reasonable to expect fewer expansion initiatives. Consequently, this lack of expansion can result in lower demand for chips and semiconductors.
Whether Michael Burry is right this time or not is up for debate.
However, investors can definitely judge his view more quickly than ever, considering the market is right in the middle of one of the most critical earnings seasons of the year. One where guidance and bottom-line earnings matter the most is a sign of how much these recent tariffs have affected businesses as a whole.
