Michael Burry bought December Nvidia (NVDA) call options ahead of the company’s record-breaking earnings, even as he added to his existing short position against the stock. He described the calls as a hedge, not a bet on gains.
The “Big Short” investor disclosed the move on his Substack, where he also revealed fresh shorts against Oracle (ORCL), Palantir (PLTR), Nebius (NBIS), and Caterpillar (CAT). His total short stock position now exceeds 21% of his portfolio, excluding puts.
A Hedge, Not a Reversal
Burry set the call strikes in the mid-to-high $200s and paid a single-digit premium per contract. He said that cost is fully offset by his existing short and put exposure, which represents 3.5% to 4% of his portfolio.
“I am not playing for gains here,” Burry said. He added he would not have made the trade without such a large bearish position already in place. He has used this hedging approach around past earnings reports, though he admitted his track record with it is mixed.
Nvidia’s earnings trap heading into Wednesday’s report had already unsettled traders, with the stock sliding for seven straight sessions beforehand.
Why Burry Still Sees Nvidia as Overvalued
Burry called Nvidia’s low price-to-earnings ratio deceptive for a company he believes commands short-lived monopoly power. He said his own theoretical value for the stock sits well below where it trades today.
He also argued Nvidia will direct more cash toward capital spending than shareholder returns, investing “into and through the top of the bubble” in a way that could later trigger sharp earnings reductions.
The stance echoes Burry’s broader campaign against the AI trade, including his 1987 style crash warning earlier this month.
Burry also expanded long positions in Birkenstock (BIRK) and Freddie Mac (FMCC) this week, calling the Birkenstock stake a full position.
Nvidia stock is up more than 12% year to date, considering its overnight pop. Whether yesterday’s earnings validate Burry’s short or hand him another loss on the hedge remains an open question.
Bitrue