Michael Burry, the investor famed for betting against the housing market, has signaled a pullback in risk, closing out his near-dated put positions on NVIDIA and Palantir Technologies Inc. However, his broader bearish strategy remains firmly intact.
According to reports, Burry announced on Substack that he tightened his risk exposure in September, trimming every position within his portfolio and holding a significant cash balance. He stated he is content to hold and observe the market's autumn trajectory, adding that this fall will prove to be an interesting period for markets.
The most notable element of this move was the closure of his put options on NVIDIA and Palantir Technologies Inc. set to expire in December 2026, without rolling these positions into contracts with later expiration dates.
Exiting Near-Term Options Without Abandoning the Bearish Thesis
Burry explicitly explained the reasoning behind this move, citing the need to avoid the rapid time decay associated with options nearing their expiration date. He characterized this action as part of a broader consolidation of overall portfolio exposure, rather than a fundamental shift in his negative outlook.
Current reports indicate that Burry still holds put options on Palantir Technologies Inc. and the Invesco QQQ Trust expiring in 2027, while continuing to maintain short positions in several technology, semiconductor, and AI-focused stocks.
In terms of his largest short positions, Oracle, Palantir Technologies Inc., and Nebius Group remain his top three bearish bets, followed by NVIDIA and the iShares Semiconductor ETF. NVIDIA currently ranks fourth on his list of short positions.
Long Portfolio: Consumer and Healthcare Focus with Limited Tech Presence
On the long side, Burry also reduced his stakes, though the ordering of his positions has not changed.
His largest holdings are led by Lululemon Athletica, which he recently described as a "fat pitch" opportunity, followed by Molina Healthcare and MercadoLibre.
The remainder of his top seventeen long positions includes Temple & Webster, Zoetis, Sprouts Farmers Market, JD.com, Birkenstock, Adobe, HCA Healthcare, Fiserv, Flutter Entertainment, Build-A-Bear Workshop, Veeva Systems, Fannie Mae, Freddie Mac, and PayPal. Burry has not disclosed the specific weight of each position within the portfolio.
NVIDIA's CEO Counters Burry's Depreciation Logic with Data
Burry's core argument for shorting NVIDIA centers on his belief that technology companies are overly optimistic in their estimates of the useful lifespan of NVIDIA's GPUs.
Many tech firms set the useful life of NVIDIA GPUs at six years for depreciation purposes, which means they only recognize one-sixth of the cost annually, thereby inflating their reported profits. Burry argues these chips realistically have a useful life of only two to three years, suggesting the six-year depreciation assumption artificially boosts corporate earnings.
However, real-world data is beginning to challenge this assessment. The Ampere A100 GPU, launched by NVIDIA in mid-2020, remains in widespread use today. Reports indicate cloud computing company CoreWeave recently signed a contract to lease these chips for AI processing, with the agreement extending into 2029, which would mark nine years since the A100's initial release.
Even more telling is the pricing trend. Financial markets platform Ornn Exchange noted on X this week that rental prices for the newer Hopper H100 chips have risen 22% month-over-month.
The CEO of NVIDIA, Jensen Huang, reposted this information, adding his own commentary. His response suggested this data clearly refutes Burry's claims regarding the overestimated lifespan of NVIDIA GPUs. The implication is that these chips are not becoming prematurely obsolete, but rather seeing sustained growth in demand.