Just over a week ago, “The Big Short” investor Michael Burry pulled most of his chips off a winning Caterpillar bet. He cut those puts by 75% after they roughly quadrupled. Then Nvidia’s leadership turmoil gave him reason to press his other bearish bets.
In a Substack post on Thursday, Burry said he doubled his put position in the Nasdaq-100. He also bought back part of a put position in the VanEck Semiconductor ETF (SMH) that he had trimmed earlier this month.
A put gains value when the asset beneath it falls. Burry said the added Nasdaq puts expire in early 2027 with a strike about 20% below the market when he bought. To be worth anything at expiration, the index would have to fall more than that.
On Nov. 12, Jensen Huang resigned as Nvidia’s CEO and board member, effective immediately, according to a company filing. Finance chief Colette Kress is the interim CEO and remains CFO.
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Yet Burry is not equally bearish on every chip stock. He named Broadcom Inc. (AVGO) and Advanced Micro Devices Inc. (AMD) as potential beneficiaries if Nvidia’s power fades, and that view shaped which chip fund he chose to short.
Burry’s fund choice tilts his bet toward Nvidia
SMH counts Nvidia among its largest holdings. Burry said he prefers it for short positions over the iShares Semiconductor ETF (SOXX) because SOXX’s top holdings are AMD and Broadcom.
He called SOXX a decent alternative for now, but not a great one. “I stick with SMH,” he wrote. Shorting a fund led by the two companies he sees as potential winners would cut against his own thesis.
That thesis centers on Nvidia’s partners and suppliers. Cloud providers Nebius and CoreWeave, chipmaker TSMC and chipmaking equipment supplier ASML benefited greatly from Nvidia’s “market power and largesse,” Burry wrote. That power, he added, “seems to have entered a new paradigm now.”
He also expects SMH valuations to fall further and the group’s earnings to decline over the next couple of years. The shift he describes starts in Nvidia’s executive suite.
Nvidia’s new boss may be less generous
Huang ran Nvidia through an unusual structure. He had about 60 direct reports and no chief operating officer, Fortune reported, leaving decision-making concentrated in his hands. That means a founder’s exit can change how a company treats partners, not just how it runs.
Burry pointed to reports that Kress had pushed back on Huang’s more aggressive dealings, only for him to go around her. If those reports hold up, Nvidia is now run by the executive who urged restraint.
A finance chief serving as interim CEO may be less inclined to stretch for partners.
Washington adds another layer. Burry also flagged a Semafor report of Justice Department probes into Nvidia, including an antitrust inquiry. That kind of scrutiny can make a dominant supplier more careful about favoring partners.
If Nvidia turns more cautious, its biggest customers have reason to shop around. That is where Burry’s two potential winners come in.
Why AMD and Broadcom could gain ground
Nvidia is estimated to control about 90% of the market for high-powered AI data center GPUs, according to Fortune. When one supplier holds that much of the market and loses its leadership abruptly, buyers have good reason to line up a backup.
AMD is the most direct alternative. Advanced Micro Devices (AMD) sells off-the-shelf graphics processors that compete head-to-head with Nvidia’s, so a cloud company can add a second supplier without designing its own chip.
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AMD has filled this role before, since its server chip comeback coincided with Intel’s manufacturing stumble.
Broadcom offers a different route. The chip and software giant helps companies such as Google build custom chips tailored to their work, reducing their reliance on Nvidia.
Burry argued that big cloud companies could gain negotiating leverage after the midterm elections, and some of them already work with Broadcom.
Even so, neither stock is a free pass. Both sit in the Nasdaq 100 and in SMH, so the puts Burry holds are partly bets against them too. Burry also repeated that tech earnings “are not what they seem,” a warning aimed at the sector broadly. That puts the spotlight on Nvidia’s next report.
Nvidia’s first report without Huang is the next test
The first real check comes Tuesday, Nov. 17, when Nvidia reports quarterly results, its first since Huang left. Investors will listen to see whether Kress talks about partner deals, supply, and pricing differently from her predecessor.
The bigger story reaches past Nvidia. The AI buildout created an economy where one supplier’s favor could lift smaller players for years. If that favor fades, chip investors may start rewarding companies that own their customer relationships over those that simply sit closest to Nvidia.
