Michael Burry consolidates bearish bets on Nasdaq and chip stocks

Michael Burry has consolidated almost all of his bearish exposure into two positions: puts on the Nasdaq-100 index and the VanEck Semiconductor ETF. In a post on his Cassandra Unchained Substack, the investor stated he is closing other bearish positions while retaining longer-dated puts on Palantir Technologies and Oracle.

The strategy shifts his wager from individual companies to broader market baskets. Burry's puts on the Nasdaq expire in April 2027, while his puts on the semiconductor ETF, traded under the ticker SMH, expire in June 2027. He did not go short the underlying assets but purchased options that give him the right, but not the obligation, to sell at a set price before expiration.

Burry suggested a possible major market peak within nine months. Reuters reported that the artificial intelligence industry requires $4.2 trillion in new revenue within five years to justify current infrastructure spending. The concentration of Burry's bets reflects the high valuations in the sector, where the VanEck Semiconductor ETF has gained more than 67% year to date.

The fund's performance is driven by heavy weighting in specific leaders. Nvidia accounts for 19.6% of the ETF and is up 20% in 2026. Taiwan Semiconductor Manufacturing represents 9.3% of the fund and is up 43%. Advanced Micro Devices makes up 5.6% of holdings and is over 170% higher. Together, these three companies represent 34.5% of the total fund.

Despite the rally, Burry previously closed his December 2026 Nvidia puts as time decay weighed on the position. The Options Industry Council notes that while put buyers limit their loss to the premium paid, time generally erodes an option's value. A purchased put can lose 100% even if the underlying investment suffers a smaller decline.

In a hypothetical scenario where an ETF trades at $100, an $80-strike put purchased for $5 breaks even at $75 at expiration. If the ETF falls 15% to $85, that put expires worthless. However, falling prices or rising expected volatility before expiration can lift a put's resale value, meaning profit does not always require crossing the expiration break-even price.

The reported changes do not include before-and-after portfolio weights or premiums paid, making it unclear if Burry's overall wager increased. Fewer positions do not automatically mean less risk, and broader targets do not necessarily indicate a bigger bet. Additionally, nine months from October extends into July 2027, which is beyond both reported option expirations. A late-window peak could fit Burry's forecast while arriving too late for these specific contracts to be profitable.