Semiconductor Short Seller's Wager Is Already Profitable

The Bet Paid Off Fast

The investor who gained fame predicting the housing collapse just made a similar call on AI chip stocks. A month later, the bet is already paying off.

Going short means betting that a stock or fund will fall.

Monday brought a 0.6% bounce, but that is a small move after a slide like that.

SOXX tracks the NYSE Semiconductor Index and holds heavyweights like Nvidia, Micron, AMD, and Intel. So this wasn't a bet on one shaky company; it was a bet against the entire chip trade.

Why Burry Saw Trouble in the Chips

Burry built his case on price. In his June 30 post, he said the Philadelphia Semiconductor Index was more stretched against its 200-day moving average, a common measure of long-term trend, than at any time since 2000.

He also put the index's price-to-sales ratio, which compares what investors pay for a stock with the revenue it actually brings in, at over 16. He called that "very high," and described SOXX as "pure form of overvaluation in an index."

The benchmark then had its worst month since 2008. Other chip watchers noticed too.

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Larry McDonald, who writes The Bear Traps Report and once led US macro strategy at Société Générale, praised the trade with a one-word response: "bravo." In an August 1, 2026 post on X, he noted that VanEck's SMH chip fund had just recorded its worst July in 30 years.

He also wrote that semiconductor ETFs were down -17.59% over the last 30 days.

The previous worst July in that 30-year window was a drop of -5.26%. "Just wow," he added.

Burry Added to the Bet as Chips Fell

Burry didn't stop at the first trade. On July 24, he said he had increased his SOXX short near $536 and that the position, along with his put options (contracts that gain value when the fund falls), was "large."

He had refreshed his put options on the fund in his June 30 post.

His renewed puts expire in March 2027 and give him the right to sell at preset prices in the low-to-mid $400s. That is a hint at where he expects SOXX to be by then.

On July 30, he said he had expanded the short again near $506, adding that the bullish chip trade was starting to "look tired."

Burry made his name in the mid-2000s by predicting the housing collapse, a story that became the book and movie "The Big Short." Late last year, he moved from running a hedge fund to sharing his own portfolio moves on Substack.

What It Means for Your Money

There is an honest catch: Burry does not share dollar amounts. So his exact July profit, and his overall portfolio result, are unknown even to subscribers who get updates far more often than almost any major investor gives to clients.

The trade still matters because it involves some of the biggest names in the market. If you own a typical index fund, you already own Nvidia, Micron, and their chip-making peers.

Burry has been a persistent AI skeptic. He has argued that big cloud companies such as Meta and Alphabet are spending too heavily on hardware and server capacity with a short useful lifespan, and he has called out Nvidia and OpenAI for signing "give-and-take" contracts to keep the buzz going.

Being a famous bear doesn't make him right. But a one-month, 21% slide in a fund full of the market's most celebrated stocks is a reminder that hot trades can cool off fast, and that rich prices leave less room for error.

For most investors, when one corner of the market carries as much weight as AI chips do today, a downturn there doesn't just stay in that corner. It reaches almost every portfolio.

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