Michael Burry Buys Nvidia Calls as a Hedge While Keeping His Short Position

TLDR

• Michael Burry added to his short position in Nvidia before Q2 earnings while also buying December call options as a hedge
• Burry describes Nvidia as “wildly undervalued on paper” but believes the stock’s real theoretical value is much lower than its market price
• He also added short positions in Oracle, Palantir, Nebius, and Caterpillar
• Nvidia reported adjusted EPS of $2.22, beating estimates of $2.09, with revenue up 106% to $96.2 billion
• Nvidia stock rose 7.2% in premarket trading after the earnings beat

Michael Burry, the investor known for his role in The Big Short, made a two-sided move on Nvidia ahead of its Q2 earnings. He added to his short position while also buying December call options, which he described as a hedge rather than a bullish bet.

BREAKING: Michael Burry has disclosed new positions.

He bought calls on Nvidia $NVDA as a hedge, adding that he still believes Nvidia will "not distribute enough to shareholders"

He also shorted more:

-Oracle $ORCL
-Palantir $PLTR
-Nebius $NBIS
-Caterpillar $CAT

And added to… https://t.co/l6jx8dcQZJ pic.twitter.com/VSWinBREno

— TrendSpider (@TrendSpider) August 26, 2026

Burry wrote on his Substack that Nvidia looks “wildly undervalued” on the surface, citing its low price-to-earnings ratio for a company with its growth rate. But he added that his theoretical value for the stock is “much lower than today’s market value.”

Burry’s Bearish Case

Burry believes Nvidia’s competitive edge in AI, its high margins, and its near-monopoly position may not last as long as the market expects. He sees risks in AI spending levels and what he calls circular financing in the sector.

He purchased December call options with strike prices in the mid-to-high $200s, paying a single-digit premium. He was clear that the calls were not made to generate profit.

Burry said he would not have bought the calls without his larger short and put exposure. His puts make up around 3.5% to 4% of his portfolio, and his total short stock exposure has climbed above 21%, not counting puts.

He acknowledged his track record with this kind of hedging around earnings has been mixed.

Nvidia’s Earnings Beat Expectations

After markets closed on August 26, Nvidia reported strong Q2 FY27 results. Adjusted earnings per share came in at $2.22, beating analyst estimates of $2.09 and rising 120% year-over-year.

Revenue surged 106% to $96.2 billion, well above Wall Street’s estimate of $92.27 billion.

NVIDIA Corporation, NVDA

Nvidia stock rose 7.2% in premarket trading following the results. That move may have tested Burry’s short position, while his call options provided some offset.

Beyond Nvidia, Burry added new short positions in Oracle, Palantir, Nebius, and Caterpillar. The moves reflect his broader concern about stretched valuations and the durability of the current AI investment cycle.

On TipRanks, Nvidia holds a Strong Buy consensus rating based on 29 unanimous Buy ratings. The average price target of $306.75 implies 46.3% upside from current levels. Year-to-date, the stock is up 12.6%.

Burry’s dual position puts him in a situation where either outcome offers some protection, though his dominant view remains bearish.

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