Burry Sees Semiconductor Rally as Beginning of End

The Big Short investor Michael Burry is sounding the alarm on semiconductor stocks. In a recent Substack post, he revealed that he has started short positions on Nvidia Corp., Applied Materials, Inc., and the iShares Semiconductor ETF (SOXX). Burry believes these stocks are set for a 30% correction, citing historical precedents where similar setups have led to declines of 30% or more.

The semiconductor rally has been fueled by South Korea's large investment plans, but Burry sees this as the beginning of the end. He notes that the price/sales ratio on SOXX is very high, over 16x, and that removing Nvidia from the index barely dents the ratio.

Burry also disclosed short positions on Caterpillar and Tesla. He has a history with Nvidia, having first disclosed a short position in May last year when the stock was at $198.09.