Famed “Big Short” investor Michael Burry has purchased December Nvidia (NASDAQ: NVDA) call options ahead of the company’s earnings, describing the move as a “hedge” against his existing short exposure.
Burry disclosed in a Substack post that the calls carry strikes set in the mid-to-high $200s, with premiums paid in single digits, and said the cost is “entirely offset” by his short position.
“I am not playing for gains here,” Burry said, adding that he would not have made the trade without such a large short and put position already in place.
He noted that the call position represents approximately 3.5% to 4% of his overall portfolio, and said he has historically employed this strategy around earnings, though he acknowledged his track record with it is not strong.
Burry’s total short stock position has now climbed to over 21% of his portfolio, excluding puts, following additional bets against Oracle (NYSE: ORCL), Palantir (NASDAQ: PLTR), Nebius (NASDAQ: NBIS), and Caterpillar (NYSE: CAT).
Despite acknowledging that Nvidia’s price-to-earnings ratio makes it appear undervalued on the surface, Burry maintains that his theoretical value for the company is “much lower than today’s market value.”
He argued that Nvidia’s current stock price is “not congruent with the market’s narrative,” pointing to the stock treading water relative to its performance in recent years.
Burry said his analysis points to a short run for Nvidia’s monopoly power, which he believes will result in falling earnings margins as competitive pressures intensify over time.
He also stated that he believes Nvidia “will not distribute enough to shareholders,” suggesting the company’s capital allocation will increasingly shift toward expenditures and investments aimed at sustaining revenue growth.
Burry warned that Nvidia’s investment “into and through the top of the bubble” may lead to “shocking reductions in earnings” not terribly far into the future, though he conceded the near-term earnings reaction is “but a coin flip.”
Beyond his Nvidia-related positions, Burry said he added to his holding in Birkenstock (NYSE: BIRK) in the mid-$30s, calling it a full position, and increased his stake in Freddie Mac (OTC: FMCC) in the mid-$5s while noting he also holds a large position in Fannie Mae.
On Stocktwits, retail sentiment at the time of reporting was bullish for NVDA, bearish for PLTR and NBIS, and extremely bearish for ORCL, highlighting the divergence between Burry’s positioning and broader retail conviction.
Year-to-date, NVDA shares are up more than 12% and NBIS has surged over 150%, while PLTR has slipped nearly 5% and ORCL has fallen more than 23%, underscoring the mixed performance across Burry’s targeted positions.
