Michael Burry doubles Nasdaq 100 puts after Huang exit

Michael Burry, the investor made famous by "The Big Short," has increased his bets against technology stocks. On Thursday, November 12, he told Substack readers that he doubled his put position on the Nasdaq 100 and added to puts on the VanEck Semiconductor ETF ↘ 1.03%, StockTwits reported. He made the trades on the day Jensen Huang resigned as CEO of Nvidia ↘ 4.34% and news broke of federal investigations that could reach the chipmaker.stocktwits.com

Burry said he used a bounce in the Nasdaq 100 off the 27,000 level to double "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 semiconductor ETF put position, expiring in June, that he had previously cut, according to the report. The post, which is behind a paywall, is titled "Enough is Enough, NVIDIA, SMH vs SOXX, Earnings Quality," with the subtitle "Time to Deploy a Couple Shorts, and One Buy," on his Cassandra Unchained newsletter.finance.yahoo.com+1

Why he picked the chip fund

Nvidia is the largest holding in the VanEck fund. Burry said semiconductor valuations "still have a ways to fall" and that he expects the fund's earnings to decline over the next couple of years. He prefers it to the iShares Semiconductor ETF ↘ 0.26% for shorting because that fund's largest holdings are AMD Advanced Micro Devices, Inc. ↗ 5.86% and Broadcom ↗ 5.54%, two companies he sees as possible winners if Nvidia's power weakens, StockTwits reported. He argued that Nebius ↘ 16.84%, TSMC Taiwan Semiconductor Manufacturing Company Limited ↘ 1.90%, ASML ↘ 2.43% and CoreWeave ↘ 6.86% "benefitted greatly from Nvidia's market power and largesse, which seems to have entered a new paradigm now." He added, "tech earnings are not what they seem."finance.yahoo.com

In the free part of the post, Burry pointed to a Semafor report that the Justice Department is running several probes that could involve Nvidia. One is an antitrust inquiry aimed at the company. Two others focus on Megaspeed and Supermicro and on the role of Alice Huang, a suspected Chinese spy. Semafor said there was no sign the department plans criminal charges against Nvidia or Huang. Super Micro ↘ 11.30% shares fell about 12% after the reports, according to Investing.com.semafor.com+1

Huang's exit hits the AI trade

Huang resigned after reports that he had two extramarital affairs, one of them with a woman U.S. intelligence believes is a Chinese spy. Chief Financial Officer Colette Kress was named interim CEO, CNBC reported. Nvidia fell more than 13% at the open, according to CNBC, and closed down more than 4%. Nebius and CoreWeave fell the most, while Broadcom, AMD and most of Big Tech held up, Yahoo Finance reported.newsobserver.com+3

The bigger bets follow profit-taking earlier in the month. On November 5, Burry sold 25% of his semiconductor ETF puts but said the remaining positions "have become very large," 24/7 Wall St. reported. Hours before Huang resigned, Burry told Nvidia shareholders they would have "another fluffy big chance to get out," Business Insider reported via Yahoo Finance.finance.yahoo.com+1

Nvidia still plans to report earnings on Tuesday, November 17, Yahoo Finance reported. It will be the first test of the company without Huang.ca.finance.yahoo.com