@bravosresearch: Michael Burry just shorted thi...

Michael Burry just shorted this stock with 49% of his portfolio

This is a BIG move, buckle up.

A thread 🧵

2/ Michael Burry just made his biggest move of Q1 2025:

Shorting 900,000 shares of Nvidia through put options

That’s almost 50% of his entire portfolio betting against one of the largest US company

3/ For context, Nvidia now makes up 6.5% of the S&P 500

And has been one of the biggest drivers of the market over the past 2 years

Just in the last month, it rallied another 20%

So is Burry seeing something the rest of the market is missing?

4/ Zooming out, Nvidia’s still one of the most explosive stories in the market

It’s up 960% from Jan 2023 to its peak in Jan 2025

But earlier this year, the stock began to decline

And 2 major concerns were behind the move

5/ First, DeepSeek, a new large language model, claimed better performance at lower cost, without needing Nvidia chips

Second, the US banned Nvidia’s top AI chips from being exported to China

These fears drove 40%+ correction in the stock

6/ Nvidia has since recovered most of those losses, but the concerns haven’t gone away

They could still weigh on future sales

And that’s likely why Burry made his move

So should we be following his lead on this Nvidia short?

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8/ Now let’s look at the data

The lines in the chart below shows Nvidia’s sales vs. capital expenditures from Amazon, Google, and Microsoft - the top 3 cloud providers

The correlation is crystal clear

9/ The capital expenditure surge has been the key driver behind Nvidia’s 941% earnings growth over the last 2 years

10/ All of this earnings growth is coming from a few tech giants allocating huge capital into AI infrastructure

And this is translating into strong demand for NVIDIA's data center products

Which are essential for AI training

11/ So it makes sense that investors get nervous when new models like DeepSeek suggest AI no longer requires larger models and more computing power

If true, this could threaten Nvidia's earnings

But we believe these fears are overblown

AI-related capital expenditures is still running at record highs

12/ In fact, spending is ramping up further

In 2025, Amazon plans to spend $100 billion, Microsoft $80 billion, and Alphabet $75 billion

Almost all of it is likely to be focused on AI and cloud infrastructure

13/ And about 50 analysts project that AI infrastructure spending will keep growing through 2028

So if DeepSeek isn’t a real threat to capital expenditure, what about the export ban of Nvidia's chips to China?

14/ After all, China makes up 12% of Nvidia’s revenue

The new export rules could wipe out $15B in sales and add a $5.5B inventory charge

That’s not a small hit

But it’s not Nvidia’s first time dealing with such a situation

15/ Back in Oct 2023, a similar ban hit Nvidia

The company responded by designing a scale down compliant chip for China

And that helped limit the damage

Today, they’re doing the same thing again

16/ Jensen Huang, Nvidia CEO, just confirmed a newly designed chip for China, set to ship in the upcoming quarter

In fact, Nvidia’s stock is also showing similar behavior to what it did back in 2023

The stock really just consolidated for months before rallying again on strong earnings

17/ On top of that, Nvidia just secured a billion-dollar deal to supply hundreds of thousands of chips to Humain, an AI startup owned by Saudi Arabia's Kingdom Investment Fund

That could completely offset the China impact

18/ With AI data center spending expected to hit $1 trillion by 2029, we’ve been bullish on semiconductors

We see this moment as similar to the early 2000s for software

And Nvidia is still positioned as a top player to take advantage of this structural trend

19/ So why is Michael Burry betting the other way?

Before jumping to conclusions, remember, 13F filings are delayed

They only show he held that short position as of March 31, 2025

We don’t know what he’s doing today

20/ Here’s where Nvidia traded on March 31 - right before Trump’s tariff announcement

That news did spark another 15% drop in the following week

It’s very possible Burry closed his short during that panic

21/ In fact, he might’ve even bought the dip

We simply don’t know

13F filings lack the day-to-day detail needed to understand what Burry’s doing right now

22/ To get that kind of insight with real-time trades, secure our 30% DISCOUNT

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23/ Thanks for reading!

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