Burry Cuts Short Position On Semiconductors As Market Climbs

The Big Short investor has been forced to abandon a short position on the chip market. 

SOXX – Daily Chart

SOXX – Daily Chart

The price of the SOXX ETF has soared since Burry’s bet in November to trade at $634.98. 

According to the latest quarterly filing, Burry’s Scion Asset Management significantly hiked its bets on Alibaba and JD.com into the end of last year. Burry became famous in the movie The Big Short for his winning bet against subprime debt in the 2008-2009 financial crisis

According to the filing, Scion increased its holdings of Alibaba by 50% between the third and fourth quarters, to 75,000 shares from 50,000. The stake was worth more than $5.5 million at Wednesday’s close.

The fund also increased its ownership in JD.com by 60% to 200,000 shares from 125,000, and that position was worth more than $4.6 million

However, the fund was forced to cut its bet against the iShares Semiconductor exchange-traded fund (SOXX). Burry, who cut similar bets against the S&P 500 and Nasdaq 100 indexes last year, didn’t have a bearish position in his portfolio in February. 

In November, Scion reported ownership of 100,000 put options tied to the iShares Semiconductor ETF, which had a notional value of $47 million, based on the fund’s closing price at the end of September.  

Bears remain wrong on the AI surge in stocks like Nvidia, which is up 32% in the last month alone. Other chip makers are also gaining, with AMD up 17% over that period. This week saw investment bank Susquehanna upping its price target on Nvidia by 36% to $850 a share, ahead of next week’s earnings. 

Consensus forecasts have the company looking at around $4.55 per share profits. Analyst Christopher Rolland expects the AI superstar to surpass the market’s expectations. Rolland sees Nvidia beating expectations by at least $1.5 billion in quarterly sales, with $99 billion in sales for its fiscal 2025.

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