Is Michael Burry Right Betting Against the Market Again?

Most new investors are familiar with one story, which was made famous by the book “The Big Short” and eventually became a blockbuster movie. One of the main characters in this story is investor Michael Burry, a contrarian investor who bet the whole ranch on one single view that the entire market was going to crash like never before.

While he was a couple of years early, he was eventually proved right, not to mention he made a killing through it.

About two years ago, in 2023, Michael Burry sent a social media post on the X platform (formerly Twitter) with one clear message: “Sell.” While few people can point to what he might have seen back then to make him turn bearish, like in the great financial crisis once again, it seems that history is starting to repeat today, with the same multi-year mark since the call was made.

While some warning signs threaten the S&P 500 index today, whether it be from consumer and business data, housing, or mounting debt in the United States, investors would be better served by examining what Burry has in his portfolio today.

For better or for worse, those who remain bullish on the technology sector may see their party slow down in the coming months, especially in shares of NVIDIA Co. (NASDAQ: NVDA).

What Michael Burry Has Done This Quarter

While this famous investor had been making new headlines due to his bullish portfolio, things have turned around aggressively in recent months. Burry has now opened a put option position for NVIDIA stock, which is reported to be worth just over $90 million, and there’s a major caveat to this position.

Options are not like outright buying or shorting a stock, as these instruments carry a leverage and expiration factor, meaning this $90 million bet could be worth north of a couple hundred million in reality.

Then there’s the timing aspect. Burry risks losing 100% of his investment if NVIDIA doesn’t decline by a certain amount and by a specific date.

While NVIDIA stock has proven resilient in its recent price performance, its current valuation remains a concern for some market participants. Furthermore, President Trump’s current trade tariff volatility has directly impacted this semiconductor business.

Future earnings growth may not be strong enough to justify NVIDIA’s valuation today, creating a downside gap that Michael Burry might be betting on.

Moving past NVIDIA, there is another bearish bet in the Burry portfolio that has also surprised many investors in the market.

Alibaba Group (NYSE: BABA) was once Burry’s most prominent position. While that stock proved to be a profitable idea, he has decided to sell all of it and also open a put option position worth as much as $26 million.

Again, this is not a short stock position but a leveraged options bet with a timing aspect.

While Alibaba might still be a great company with strong growth prospects, Burry can’t justify investing in NVIDIA due to tariffs.

It is also a long bearish position and is just as exposed to the bearish sentiment in today’s market.

Extending his view on Chinese retail stocks took a lot more than just Alibaba down with it.

Consumer Slowdowns, Tariffs Justify More Bearish Bets

Another multi-million put option position has been reported for shares of JD.com Inc. (NASDAQ: JD) as well as PDD Holdings Inc. (NASDAQ: PDD). This supplement to Alibaba’s position is directly tied to increased costs faced by consumers and businesses who import goods from China directly.

The Burry thesis is already being proven right, as during the last week of May 2025, PDD stock reported its latest quarterly earnings.

The results weren’t what the markets expected, as revenues and earnings missed expectations and contracted compared to the same quarter reported last year.

As a result, the stock was down by just under 15% in a single day, likely foreshadowing similar behavior from Alibaba and JD stock when those two companies report their earnings results this quarter.

The linkage in these E-commerce businesses can also be made back to NVIDIA in this macro bearish view.

With these high-tech businesses experiencing less demand and increased uncertainty in the coming months due to ongoing tariff negotiations, it would be reasonable to expect fewer expansion initiatives. Consequently, this lack of expansion can result in lower demand for chips and semiconductors.

Whether Michael Burry is right this time or not is up for debate.

However, investors can definitely judge his view more quickly than ever, considering the market is right in the middle of one of the most critical earnings seasons of the year. One where guidance and bottom-line earnings matter the most is a sign of how much these recent tariffs have affected businesses as a whole.

Written by Gabriel Osorio-Mazilli

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