Michael Burry Sells Nvidia Puts Days After Opening a Long Position and Calling the Stock 'Wildly Undervalued'

Michael Burry said Wednesday that he entirely exited his December 2026-dated put options on Nvidia, without rolling the trades into later-dated contracts.

In a recent Substack post, 'The Big Short' investor stated that he 'pulled in risk' in September, and that 'this will be an interesting market this fall.'

While highlighting that he is 'pulling back on exposures across the portfolio,' Burry reportedly sold his December-dated Nvidia puts to avoid rapid time decay or the erosion of the options' value as contract expiry approached.

Just a few days ago, in late August, Burry had said Nvidia is 'wildly undervalued', and opened a long position in the company, which he believes is leading the formation of an AI bubble.

'Low price-to-earnings ratio for a big grower that currently commands monopoly rents,' Burry noted on Nvidia in an earlier Substack post, hours before the AI leader posted blockbuster fiscal Q2 results on 26th August. Nvidia believes it could generate over $100 billion in the next quarter as demand for AI infrastructure continues to outpace supply.

Burry had purchased Nvidia call options with strike prices in the mid-to-high $200s, but described the trade as a 'hedge', adding that the premium on the calls is considerable, but 'entirely offset' by his existing short position on the stock.

However, the latest Nvidia trade reversal comes after Burry continued to ramp up his Nvidia puts since early 2025. The investor community is also wondering how much he lost on those bets after the latest exit, but estimating that would require official figures like the premium he paid for every put, the exact number of contracts bought and sold, and whether positions were closed or opened across multiple trades.

In the latest Substack post, Burry said he now has some cash that he is 'happy to sit on' while he watches how markets develop. The famed investor also sold his December-dated put options on Palantir Technologies, but reportedly continues to hold 2027-dated puts on the AI company.

Is Burry Turning Bullish on Nvidia?

Burry's latest trades and Nvidia's robust performance amid record demand for AI infrastructure triggered speculations that he could be slowly turning bullish on leading AI companies despite shuttering his hedge fund on AI bubble fears last year.

However, he likely continues to believe in his AI bubble thesis, given his existing short positions on Oracle, Nebius, Micron Technology, and CoreWeave. Although he trimmed these positions, as per the latest update, he did not fully exit or rearrange them.

Burry has consistently warned about an AI bubble and how some major technology companies may be understating depreciation by using longer useful-life assumptions for computing equipment, arguing that this could make reported earnings appear stronger than they otherwise would.

Burry has described such practices as 'one of the more common frauds of the modern era,' but that characterisation is his allegation, not an established finding of accounting fraud.

He had even warned in an earlier Substack post that leading companies like Nvidia and Elon Musk's xAI are leveraging GPU-backed securities deal structures to secure funding to power their growing AI data centres while putting the retirement funds of Americans at risk.

He had detailed in his post the exact pipeline that moves retiree savings into running Musk's AI data centres without them knowing about it, describing such deals as 'fugazi', his word for fake.

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