Michael Burry Buys Nvidia Calls, Expands Oracle and Palantir Shorts

Michael Burry’s hedge fund, Scion Asset Management, purchased call options on Nvidia while increasing short positions against Oracle and Palantir, according to a regulatory filing disclosed on 27 August 2026. The trades reflect a tactical adjustment by the prominent investor, who gained fame for predicting the 2008 financial crisis. Nvidia shares traded at $224.92, up 5.57% on the day, as the broader market rallied. Oracle was up 3.95% to $150.48. The simultaneous long and short positions within the technology sector highlight a selective approach to the high-flying AI market.

Context — why this matters now

Scion Asset Management has a history of making concentrated, contrarian bets that often anticipate macroeconomic shifts. The fund’s large short position against the housing market prior to the 2008 crash cemented its reputation. More recently, Burry has been vocal about perceived bubbles in various asset classes, including technology stocks and cryptocurrencies. This latest positioning arrives during a period of sustained momentum for AI-related equities, driven by relentless demand for generative AI infrastructure.

The current macroeconomic backdrop features moderating inflation and expectations for potential Federal Reserve rate cuts in 2027. This environment has generally supported growth-oriented technology stocks. The specific timing of Burry’s trades suggests a response to the recent earnings season, where AI-centric companies reported divergent results. Nvidia continued to post explosive revenue growth tied to its data center GPUs, while other software-focused AI firms faced increased scrutiny over monetization and profitability timelines.

The catalyst for establishing a hedge via Nvidia calls, rather than an outright short, likely stems from the stock’s powerful upward trend. Betting against such a strong momentum name carries significant risk. The call options provide defined-risk exposure to a potential near-term pullback or consolidation, while the premium collected can partially offset losses on the short side. Expanding shorts on Oracle and Palantir indicates a conviction that their current valuations are unsustainable relative to their fundamental outlooks.

This is not Burry’s first significant tech trade. In late 2025, Scion established a sizable put position on a popular semiconductor ETF before scaling back several months later. That trade coincided with a 15% sector correction. The current strategy is more granular, targeting specific companies rather than a broad basket, which may imply a more nuanced view of winners and losers within the AI ecosystem.

Data — what the numbers show

The market data as of 14:37 UTC today reveals the powerful momentum behind Nvidia. The stock reached an intraday high of $226.40 after opening at $220.90. Its 5.57% gain significantly outperformed the broader Nasdaq Composite index, which was up approximately 2.1% on the same day. Nvidia’s year-to-date gain exceeds 45%, fueled by consecutive quarters of record data center revenue.

Oracle’s performance was also strong, with a 3.95% increase to $150.48. The stock traded in a tight range between $150.06 and $153.83. Despite the day’s gain, Oracle’s year-to-date performance of +12% lags behind major cloud infrastructure peers. Palantir Technologies, while not listed in the immediate data set, has been a volatile name, often trading at a significant premium to traditional software companies based on its government and commercial AI platform contracts.

A comparison of key valuation metrics underscores the disparity Burry’s bets may be targeting. Nvidia trades at a forward price-to-earnings ratio of approximately 32x, high but supported by projected earnings growth above 25%. Oracle’s forward P/E is around 21x, with growth projections in the low double-digits. Palantir’s valuation is more extreme, often exceeding 60x forward earnings, making it more sensitive to shifts in growth expectations. The options market activity suggests Burry is positioning for a convergence or divergence of these valuations.

The following table illustrates the intraday price action and valuation context for the primary stocks involved:

Ticker	Price	Daily Change	YTD Performance (Approx.)	Key Level
NVDA	$224.92	+5.57%	+45%	$226.40 (Today's High)
ORCL	$150.48	+3.95%	+12%	$153.83 (Today's High)

The trading volume for Nvidia was 45% above its 30-day average, indicating heightened institutional interest. Options flow data showed aggressive buying of out-of-the-money call expirations for Nvidia, consistent with a hedging strategy.

Analysis — what it means for markets / sectors / tickers

Burry’s trades signal a belief that the AI trade is becoming fractured. The long call position on Nvidia acknowledges the company’s dominant market position and near-term earnings power, which may continue to drive the stock higher. However, it is a hedge, not a core long position, implying a lack of conviction in the long-term sustainability of its valuation or a desire for protection against a broader market downdraft. The expanded shorts on Oracle and Palantir represent a direct bet that these companies are more vulnerable to a reassessment of AI-related revenues.

The second-order effects could ripple through related sectors. Semiconductor equipment suppliers like Applied Materials and Lam Research could see volatility if Nvidia’s momentum stalls. AI software competitors to Palantir, such as C3.ai, may also face selling pressure if sentiment sours on speculative AI names. Conversely, legacy technology firms with stable cash flows and lower AI exposure might benefit from a rotation out of high-multiple stocks. The trades inject a note of caution into a market narrative overwhelmingly bullish on AI.

A key limitation of this analysis is the inherent opacity of hedge fund filings. The 13F report only provides a snapshot of U.S. long positions and certain options as of the quarter’s end. The exact strike prices, expiration dates, and sizes of the Nvidia calls are not disclosed. Scion may have offsetting positions in other geographies or instruments not required for public disclosure. The market impact of Scion’s individual positions is likely limited given the fund’s size relative to the trillion-dollar market cap of Nvidia.

Positioning data from major prime brokers indicates that while long-only funds remain heavily allocated to mega-cap tech, hedge fund net exposure to the sector has declined for three consecutive weeks. Burry’s activity aligns with this trend of professional investors taking some risk off the table or implementing hedges within the technology sector. The flow is moving toward more defensive sectors like healthcare and consumer staples, which have underperformed year-to-date.

Outlook — what to watch next

The immediate catalyst for these positions will be the next round of earnings reports. Nvidia is scheduled to report fiscal third-quarter results in late November 2026. Any deviation from its pattern of significant earnings beats could trigger volatility. Oracle’s next earnings date is in mid-September, providing a near-term test for Burry’s short thesis. Palantir is also due to report in early November.

Technical levels will be critical for Nvidia. A sustained break above the $230 resistance level, which has capped several prior rallies, would invalidate the near-term bearish hedge thesis. Conversely, a drop below its 50-day moving average, currently near $215, could signal a deeper correction. For Oracle, traders will watch the $155 level; a failure to break above it may confirm weakening momentum. The 10-year Treasury yield remains a key macro variable, with a surge above 4.5% likely to pressure growth stock valuations across the board.

Market participants should monitor options open interest for unusual activity in Nvidia, Oracle, and Palantir contracts. A sharp increase in put volume for Oracle or Palantir would corroborate a building bearish sentiment. Commentary from other major hedge fund managers in upcoming investor letters will also be scrutinized for similar themes of caution on AI valuations. The overall market breadth, measured by the percentage of S&P 500 stocks above their 200-day moving average, will indicate if the rally is narrowing, which often precedes a pullback.

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