Famed investor Michael Burry is now shorting semiconductor stocks, one of the hottest areas of the technology sector right now.
Burry, a medical doctor turned hedge fund manager, famously shorted the U.S. housing market ahead of the 2008 financial crisis and was profiled in the book and movie “The Big Short.”
In this year’s third quarter, Burry opened short positions against semiconductor stocks, according to the latest regulatory filling with the U.S. Securities and Exchange Commission (SEC).
Specifically, Burry’s fund, Scion Asset Management, has taken out bearish put options worth $47.4 million U.S. against the iShares Semiconductor ETF (SOXX).
The ETF, whose largest holdings include Nvidia (NVDA), Advanced Micro Devices (AMD), and Intel (INTC) is up 45% this year.
Put options convey the right to sell shares at a fixed price in the future and are typically bought with expectations that a security will decline in value over the short or medium-term.
The regulatory filings also showed that Burry’s fund no longer held put options against the Nasdaq 100 and S&P 500 indices.
In the second quarter, Burry’s firm had bet $739 million U.S. against the two U.S. stock indices. That bet proved correct as the S&P 500 fell 3.6% in Q3 of this year, while the Nasdaq declined 3% between July and September.
Some other well-known investors also changed their positions in the semiconductor sector recently. Notably, Soros Fund Management, the asset manager of billionaire George Soros, sold its 10,000 shares in Nvidia (NVDA) during Q3 and bought 80,000 shares in Taiwan Semiconductor Manufacturing Company (TSM) instead.
Nvidia, a leading chipmaker whose technology is central to artificial intelligence (A.I.) applications, has seen its stock rise 247% this year to trade at $496.56 U.S. per share.
