Short-seller Michael Burry just made his view on Nvidia (NVDA) stock a lot harder to ignore.
In a new Substack post, the popular investor disclosed that he added to his bearish Nvidia position, loading up more on long-dated puts, with the stock still at the heart of the AI rally.
At the same time, he scooped up shares in the biggest Chinese tech companies, such as Alibaba and JD.com.
For perspective, Nvidia stock has had a forgettable run of late.
It’s tracking in the red over the past six months, down 2% and only up 1.2% year to date. Those numbers pale in comparison to its one-year performance, which was roughly 65%.
That said, Burry said he bought January 2027 $115 strike puts at $3.30 and is holding onto $100 strike puts from earlier.
He sees the trade as 3% of notional value, arguing in his post that “borrowing costs could easily get that high or higher if Nvidia stock really starts falling.”
Simultaneously, his new Alibaba and JD.com additions show that he’s rotating into where he sees value, while leaning harder against the market’s most crowded trades.
Who is Michael Burry?
Clearly, Michael Burry needs no introduction in the investing world.
He is arguably the most popular contrarian on Wall Street, having built his legend by spotting and betting against the housing bubble before the 2008 financial crisis hit.
That trade earned him the moniker “The Big Short,” and more importantly, generated nearly $100 million for himself and $725 million for his investors, CNBC reported.
For perspective, he launched his hedge fund, Scion Capital, in 2000, according to MoneyWeek. He shut it down after the financial crisis, and then returned in 2013 with Scion Asset Management.
The firm managed a relatively small $155 million worth of assets as of March 2025 before being wound down in November 2025.
Nevertheless, he remains as relevant as ever, with his sharp takedowns on AI and related topics. These days, he posts on X (the former Twitter) and publishes on Substack, swinging for the fences about the hottest investing themes.
Nvidia market cap growth over time
- Nvidia’s current market cap: About $4.58 trillion, according to Yahoo Finance
2025 year-end market cap: $4.64 trillion2024 year-end market cap: $3.29 trillion
2023 year-end market cap: $1.22 trillion
2022 year-end market cap: $364.18 billion
2021 year-end market cap: $735.27 billion
Source: Companiesmarketcap.com
Bloomberg/Getty Images
The logic behind Burry’s new Nvidia trade
Burry’s bearish call on Nvidia comes with structure, and the numbers make that intent crystal clear.
Nvidia stock is currently trading at around $188.63, according to Yahoo Finance, so the $115 strike sits at 39% below the current price.
If we factor in the premium, the breakeven is around $111.70 (approximately 40.8% lower).
That feels more like a defined-risk bet on a meaningful reset.
The rationale comes down to a few core ideas.
- Valuation stretch: Nvidia is at the heart of the AI boom, leaving virtually no room for disappointment.
- Cost efficiency: Long-dated puts effectively avoid rising borrowing costs linked with outright shorting.
- AI durability risk: Burry questions whether massive data-center spending can hold up.
Nvidia’s filings add to that context.
Fiscal 2026 sales jumped 65%, with Q4 up 73%, but the company still carried $95.2 billion in supply obligations.
So if we see sluggishness in top-line expansion, that leverage effectively cuts away.
For some context, in my recent coverage, I noted that Goldman Sachs said hedge funds have been cutting exposure to Nvidia stock at the fastest pace in 13 years.
Burry’s move essentially takes that narrative a step further.
Why Burry is betting against Nvidia
Burry’s AI skepticism began in May last year, when his hedge fund, Scion, disclosed a new Nvidia put position in its 13F filing.
Fast forward a few months, and that bearish position turned into a clear thesis with Nvidia in the crosshairs.
Burry compared Nvidia to Cisco, a must-own infrastructure stock of the dot-com era, which saw its shares tank by roughly 90%, taking roughly 25 years to reclaim its 2000 peak.
More Nvidia:
- Goldman Sachs sends blunt message on Nvidia stock after GTC
- Nvidia CEO makes bombshell call on AI’s next big thing
- Bank of America resets Nvidia stock forecast after meeting with CFO
He argues that the AI buildout looks like classic bubble behavior, with too much money chasing a relatively unproven story.
The biggest AI players, such as Microsoft, Alphabet, Meta, Amazon, and Oracle, are looking to spend a whopping $3 trillion in infrastructure spending over three years.
However, whether that investment will pay off in terms of returns remains the billion-dollar question.
Additionally, Burry has accused the AI cloud giants of using creative or aggressive accounting techniques to make the hardware-heavy investments look much more profitable than they really are.
Nvidia is clearly the must-buy “picks-and-shovels” company of the relentless AI rush, which makes it the most exposed if expectations cool off.
Wall Street price targets for Nvidia stock
Wall Street’s average price target for Nvidia is $268.22, implying 42.2% upside, with analyst targets ranging from $140 on the low end to $380 on the high end.
- Bank of America: $300 (+59.0% vs. current price)
- Barclays: $275 (+45.8% vs. current price)
- Goldman Sachs: $250 (+32.5% vs. current price)
- JPMorgan: $265 (+40.5% vs. current price)
- Morgan Stanley: $260 (+37.8% vs. current price)
- UBS: $245 (+29.9% vs. current price)
Related: Bank of America drops curt 4-word verdict on the economy
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