“Big Short” Bury increases the influence of NASDA-100 and semiconductor says Nvidia (NVDA.US) may enter a “new paradigm”

The Zhitong Finance App learned that “big short” Michael Berry increased his bearish bet on the NASDAQ 100 index and semiconductor stocks. The reason he gave was that after Hwang In-hoon stepped down as CEO of Nvidia (NVDA.US), Nvidia's influence on the AI infrastructure market was worrying.

Bury posted an article on Substack on Thursday saying that he used the opportunity of the Nasdaq 100 index to “double his put option positions in the Nasdaq 100 Index and drop the exercise price to an imaginary range of about 20% lower than the current price in early 2027.” He also made up 25% of his Vaneck Semiconductor ETF (SMH) put option positions that had previously been reduced. The relevant options will expire in June next year.

According to Bury, AI infrastructure and semiconductor companies associated with Nvidia, including Nebius (NBIS.US), TSM.US, ASML.US (ASML.US), and CoreWeave (CRWV.US), “have all greatly benefited from Nvidia's market power and generosity, and this situation now seems to have entered a new paradigm.” He said he is watching for signs of “a marked decline in Nvidia's influence,” while believing that Broadcom (AVGO.US) and AMD (AMD.US) may be potential beneficiaries of this transformation.

Shorting Vaneck Semiconductor ETF: Valuation, Profit, or Both Decline

SMH listed Nvidia as one of its largest holdings. Burry said that the ETF's valuation “still has room to decline” and that earnings are expected to decline in the next few years. He also claimed that in choosing a short bid, he preferred SMH over iShares Semiconductor ETF (SOXX) because the latter's main holdings were AMD and Broadcom.

“At the moment, SOXX is a good but not the best choice. I'm still sticking with SMH,” Barry wrote.

Barry also proposed that after the midterm elections, “under the administration of the Democratic Party,” hyperscale cloud service providers may gain greater bargaining power and benefit from a longer delay in data center construction. He pointed out that the rise in these stocks helped offset Nvidia's weak performance in the Nasdaq 100 index.

Furthermore, Barry reiterated his view: From the perspective of current shareholders, conventional accounting earnings overestimate the profitability of technology companies. “We must not forget that apart from scandals, profits in tech stocks are not apparent,” he wrote.

Notably, Bury's view of Nvidia is not one-way bearish. He recently said that Nvidia's earnings report next week “will be excellent”, on the grounds that any impact related to the Hwang In-hoon crisis will take time to be reflected in the financial report. But he believes this earnings report provides a good opportunity for the bulls to sell: “Nvidia's bulls will have another great opportunity to leave the market. Let's get out of here.”