Another Big Short?

Michael Burry, the hedge fund manager best known for predicting the 2008 financial crisis and being portrayed in The Big Short, made headlines again for shorting Nvidia stock (NASDAQ: NVDA). Burry’s investment firm, Scion Asset Management, disclosed a significant bearish position against Nvidia in its 13F filing with the Securities and Exchange Commission (SEC), revealing put options against shares of the AI and semiconductor giant.

Nvidia had experienced a meteoric rise leading up to Burry’s short, driven largely by its dominance in AI-related chipmaking. With the explosion of interest in generative AI and large language models, Nvidia's graphics processing units (GPUs) became the backbone of computing infrastructure for companies like Microsoft, Google, and OpenAI. The company's stock surged more than 200% in 2023 alone, leading some analysts to compare it to past market bubbles driven by extreme investor enthusiasm and momentum.

Burry’s decision to short Nvidia reflects his consistent skepticism toward market euphoria. He has a long history of contrarian investing—betting against assets when others are bullish, often warning of overvaluation. In this case, Burry appeared to believe Nvidia’s valuation had become disconnected from its fundamentals, trading at high price-to-earnings multiples and reliant on continued exponential growth to justify its stock price.

Critics of Burry’s position pointed out that Nvidia’s earnings had been growing rapidly and the company was securing new contracts and partnerships at a historic pace. Bulls argued that the AI boom was still in its early stages and Nvidia was uniquely positioned to benefit for years to come.

Despite this optimism, Burry’s short position attracted attention due to his track record. His puts on Nvidia were not an outright short sale of the stock but rather an options-based bet that the stock would decline. This strategy allowed him to cap potential losses while maximizing upside if the stock dropped significantly.

Whether Burry’s short on Nvidia proves prescient or premature remains to be seen. By early 2025, Nvidia’s performance had continued to be strong, but volatility and concerns about AI market saturation had increased. As with his infamous bet against the housing market, Burry’s Nvidia short is a high-conviction, high-risk move that could either reinforce his legend—or prove that even great investors can misread the timing of a bubble.