Burry Ditches AI Trade, Bets on Beaten-Down Stocks
Michael Burry, the founder of Scion Asset Management and star of The Big Short, has made significant changes to his investment portfolio. According to a recent portfolio breakdown, his largest positions are calls on UnitedHealth Group (UNH) at 18.88%, followed by Regeneron Pharmaceuticals (REGN) at 18.16%, and Lululemon Athletica (LULU) at 16.43%. Burry has taken a contrarian approach, betting on beaten-down stocks that have been left for dead by the market.
Burry's portfolio is heavily weighted towards call options, giving him leveraged upside on the dip with defined downside. This strategy allows him to profit from potential price increases in these stocks without being overly exposed to losses. In a notable departure from current market trends, Burry has avoided the mega-cap AI trade altogether.
One of Burry's most significant holdings is UNH, which he believes is poised for a rebound after a brutal 2025. The company's Q2 report showed a significant margin recovery, with adjusted EPS coming in at $6.38 on revenue of $112.03B. Regeneron, another key holding, has seen its Dupixent treatment offset the erosion of EYLEA sales.
Lululemon, however, is the most contentious position, down 52.07% year-to-date to $99.60. Burry sees value in the company's strong balance sheet and near-zero debt, despite a significant decline in revenue and comparable sales. The upcoming holiday season and new leadership under Heidi O'Neill will be crucial for Lululemon's recovery.