Famed investor Michael Burry—best known for his prescient call on the 2008 subprime mortgage crisis—is pulling back on portfolio risk and shedding a portion of his bearish bets against high-flying artificial intelligence stocks. However, the move may not signal a true change of heart, as the investor emphasizes he is simply content sitting on cash while maintaining other defensive positions.
According to a recent Substack post, Burry has exited his December 2026 put options on Nvidia and Palantir Technologies entirely. Rather than rolling these short bets into later-dated contracts, he opted to close them out to prevent rapid time-based decay (theta decay) and reduce overall exposure.
Despite scaling back these specific positions, Burry clarified that the move does not mean he is turning bullish on the broader market. He continues to hold other defensive hedges, including 2027 put options on Palantir and the Invesco QQQ Trust Series 1 ETF, which tracks the tech-heavy Nasdaq 100. “This will be an interesting market this fall,” Burry wrote, adding that he is “pulling back on exposures across the portfolio” and is “happy to sit on cash.”
Lingering Fears of a Dot-Com Style Crash
Burry’s trimming of select put options comes on the heels of continuous warnings regarding what he views as dangerously stretched AI valuations. He has repeatedly cautioned that the current market landscape shares eerie technical and fundamental parallels with the 1999 Dot-com bubble and the historic 1987 market crash.
Earlier this year, the investor pointed to massive venture capital influxes, rising AI-related debt issuance, and extreme speculative optimism as signs that market valuations are detaching from economic reality. While acknowledging that the S&P 500’s push toward new highs could continuously pull fresh capital into the market—potentially driving valuations even higher—Burry remains convinced that a major market top is looming.
A Legacy of Contrarian Betting
Burry’s career has been defined by going against consensus sentiment. He cemented his market legend status prior to the 2008 financial crash, when he meticulously analyzed mortgage-backed securities and recognized that widespread subprime defaults would tank the broader economy. Despite fierce pushback from clients and intense pressure that nearly shuttered his firm, he bought credit default swaps against the housing market and ultimately netted roughly $100 million for himself and $725 million for his investors—a feat immortalized in the book and film The Big Short.
While his latest portfolio adjustment shows he is reducing immediate risk and locking into cash, Burry’s ongoing holdings of long-term puts suggest he is not ready to embrace the AI frenzy just yet.
