Michael Burry Shorts This AI Giant, Then Buys Calls as a Hedge: Why?

Famed investor Michael Burry has disclosed buying December call options on Nvidia (NVDA) strictly as a hedge while expanding his core short position against the semiconductor giant. Burry revealed the positioning on Substack ahead of Nvidia's earnings, noting the call strikes sit in the mid-to-high $200s with single-digit premiums. The cost of these options is fully offset by existing short and put exposure, which currently represents 3.5% to 4% of his portfolio. Overall, Burry's total short equity exposure now exceeds 21% of his portfolio, excluding put options. Burry maintained that Nvidia is significantly overvalued, arguing its low price-to-earnings multiple is deceptive because the company's monopoly pricing power will prove temporary. He warned that heavy capital expenditures through the top of the artificial intelligence market bubble will eventually cause severe earnings contractions. Beyond Nvidia, Burry disclosed fresh short positions in Oracle, Palantir, Nebius, and Caterpillar, underscoring his aggressive skepticism toward the ongoing AI and enterprise tech rally.