Michael Burry's latest revelation shows that while he continues to be bearish on the AI concept stock, he has also bought long options on NVIDIA as a hedge. This investor, widely known for his book "The Big Short," stated that this option trade does not represent a shift to a bullish stance, but rather is aimed at controlling the risk of his larger short positions.
Short positions continue to expand.
Burry stated that he purchased call options on NVIDIA with a December expiration date and an exercise price in the range of over $200, in order to hedge his short positions in NVIDIA and other AI related stocks. According to his disclosure, the short stock positions, excluding put options, account for more than 21% of his portfolio.
In addition to NVIDIA, he also revealed bearish bets on Oracle, Palantir, Nebius, and Caterpillar. His overall approach is not to bet that short-term performance will weaken immediately, but rather to believe that the market has already priced companies that will benefit from AI's infrastructure construction too high.
Doubts focus on valuation and capital expenditure.
Burry has recently been continuously questioning whether NVIDIA's valuation is reasonable. He believes that traditional price-earnings ratios may underestimate the relevant risks, as such companies currently benefit from strong pricing power, as well as from the concentrated release of AI expenditures driven by a few major customers.
He also warned that aggressive expansion of capital expenditure within the industry may lead to profit pressures in the future. If the demand for AI infrastructure slows down, the large-scale investments made earlier may not necessarily translate into sustained returns.
However, Berry did not deny that NVIDIA's short-term fundamentals are still strong. He has previously stated that NVIDIA is still likely to deliver a very strong quarterly report. This also indicates that his core judgment is more focused on the medium to long-term valuation, rather than denying the company's current operational performance.
NVIDIA's performance continues to raise the bar
Judging from the latest financial reports, NVIDIA's growth still far exceeds most market expectations. The company reported revenue of $96.2 billion for the second fiscal quarter of 2027, a year-on-year increase of 106%; of this, data center business revenue amounted to $89 billion, a year-on-year increase of 117%.
The company also provided revenue guidance of approximately $108 billion for the next fiscal quarter, which is higher than the previous quarterly forecast of $91 billion. This set of data reinforces the bullish view that the demand for AI infrastructure is still high, and the investment from cloud providers and model developers has not yet significantly cooled down.
The current focus of market debate is no longer just whether NVIDIA can continue to grow, but whether the scale and duration of this growth are sufficient to support its current valuation. As semiconductor companies, cloud service providers, and AI developers continue to invest substantial funds, whether the AI trading can continue remains one of the most watched topics in the U.S. stock market.
