Key facts
- Michael Burry shorted the iShares Semiconductor ETF (SOXX) at approximately $643 on June 30.
- The SOXX ETF declined 21% to $505 by July 31.
- The VanEck Semiconductor ETF (SMH) had its worst July in 30 years.
- Burry cited the Philadelphia Semiconductor Index being overextended and having a high price-to-sales ratio.
- He has since increased his short positions in SOXX.
Michael Burry, the investor famously known for his bet against the mid-2000s housing bubble, appears to have successfully profited from a bearish stance on semiconductor stocks. On June 30, Burry announced on Substack that he had shorted the iShares Semiconductor ETF (SOXX) at approximately $643 and had also refreshed his bearish put options on it.
Over the subsequent month, the SOXX ETF, which tracks the NYSE Semiconductor Index and includes companies like Nvidia, AMD, Micron, and Intel, fell by 21% to close at $505 on July 31. This period also saw the VanEck Semiconductor ETF (SMH), another significant chip index, experience its worst July performance in three decades, according to Lawrence McDonald, author of 'The Bear Traps Report'.
Burry had explained his negative outlook on chip stocks in his June 30 post, noting that the Philadelphia Semiconductor Index was at its most overextended point since 2000 and that its price-to-sales ratio was 'very high' at over 16. He labeled the SOXX ETF as a 'pure form of overvaluation in an index.' He indicated he had 'rolled' his puts to expire in March 2027 with strike prices in the low-to-mid $400s, suggesting an expectation for the index to reach those levels.
In recent weeks, Burry has reportedly doubled down on his bearish positions. He disclosed on July 24 that he had strengthened his SOXX short around $536, describing it as a 'large position' alongside his puts. Further increasing his short at around $506 on July 30, he stated that the bullish chip trade was losing momentum and 'starting to look tired.' Burry has also disclosed bets against individual chipmakers like Nvidia and Micron, as well as the broader Nasdaq 100.
While Burry provides frequent updates to his subscribers, the exact dollar amounts of his trades are not disclosed, making it unclear how much he profited from these specific wagers. He has been a notable skeptic of the broader AI boom, warning that hyperscalers are overspending on potentially soon-to-be-outdated infrastructure and calling out AI giants for mutually reinforcing their market buzz through contracts.