Michael Burry doubled his bet against Nasdaq-100, warns of AI stock market correction

Michael Burry, the investor who profited from the 2008 subprime crisis, doubled his put-option position on the Nasdaq-100. In a November 12 post on his Substack column “Cassandra Unchained”, he said Nvidia's dominance over the supply chain may enter a “new paradigm” following Jensen Huang's departure.

According to Burry, his new contracts expire in early 2027 and carry a strike price roughly 20% below the level at which the index is priced. He placed the trade as the index rebounded. He also bought back 25% of his earlier put position on the VanEck Semiconductor ETF (SMH); they will expire in June 2027. On November 5, he had cut the same position by 25%, saying his remaining bets were still very large.

In the past, AI infrastructure and semiconductor companies were deeply tied to Nvidia — such as Nebius, TSMC, ASML and CoreWeave — all benefited from its market position. But he claims that "Nvidia's influence is clearly weakening" and the likely beneficiaries of this are going to be Broadcom and AMD.

He argues that with Jensen Huang’s gone, new leadership will stall the massive equity investments. He claimed that Nvidia made about $42.4 billion in equity investments in the first half of 2026. This means roughly 30 cents of every $1 of revenue is being ploughed back into AI buildout via capital injections, backstops, and special-purpose financing vehicles.

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"The threat for NVIDIA and its AI ecosystem is that the cash may cease to flow. New investments will be more tentative, if at all. There may even be write-offs."
Burry compared the Nasdaq-100's October 6 interim high with the peak of the 2000 dot-com bubble and compared the enthusiasm for artificial intelligence with a “bull trap”. He forecasts a significant correction in chip and technology stocks before mid-2027.
Burry advised investors to exit the stock, saying a leadership change could weigh on Nvidia's margins and growth, with effects across the AI supply chain. He noted that while Nvidia's upcoming November 17 earnings report should remain strong due to pre-booked sales.

The size of the new Nasdaq-100 position has not been disclosed in a regulatory filing since he no longer files quarterly Form 13F reports with the SEC for Scion Asset Management. This was self-stated on Substack.

Burry is a former physician who founded Scion Asset Management in 2000. He became widely known for betting against the US subprime mortgage market before the 2008 financial crisis, a trade that earned his investors hundreds of millions of dollars. His story was told in Michael Lewis's book "The Big Short" and its Oscar-winning film adaptation, in which Christian Bale played him.