Michael Burry's hedge fund, Scion Asset Management, has taken a $47 million position against a major semiconductor ETF, signaling a bearish outlook on a sector that has significantly contributed to U.S. equity gains in 2023. The move comes as part of a broader reshuffling of the fund's investments, which has seen its portfolio condensed from 33 positions down to 13.
Scion secured puts on 100,000 shares of the $9.6 billion iShares Semiconductor ETF (SOXX), which is tracked by the NYSE Semiconductor Index and includes top semiconductor companies like AMD (NASDAQ:AMD), Broadcom (NASDAQ:AVGO), and Nvidia (NASDAQ:NVDA). Notably, Nvidia has seen an impressive surge this year, growing by 247% and achieving a $1 trillion market cap.
The investment strategy adjustment also involved closing a substantial $1.6 billion bet against major U.S. equity benchmarks, including the S&P 500 and Nasdaq 100, through puts against SPY (NYSE:SPY) and QQQ ETFs. This decision marks a pivot from earlier in the year when Burry had advised investors to sell at the beginning of the year—a recommendation he later acknowledged as a mistake on X (formerly Twitter).
In addition to these strategic moves, Scion has re-initiated positions in Chinese e-commerce giants Alibaba (NYSE:BABA) and JD (NASDAQ:JD).com after previously liquidating these holdings in Q2. The latest actions underscore Scion's dynamic approach to investment in a fluctuating market landscape, with an eye on both domestic and international opportunities.
Burry's bets have been closely watched since his famous prediction of the 2008 financial crisis, with market observers paying keen attention to his positions as potential indicators of broader market trends. The re-entry into Alibaba and JD.com suggests a renewed confidence in certain segments of the tech industry despite the overall cautious stance reflected by the wager against semiconductor valuations.
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