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Semiconductor ETF Michael Burry shorted hits all-time high

Semiconductor ETF Michael Burry shorted hits all-time high

Renowned investment figure Michael Burry, famed for his prescient forecasts during the 2008 recession, finds himself navigating turbulent waters in his latest bearish venture against the semiconductor sector. 

With last month’s surprising closure of his short targeting the broader US stock market at a significant loss, Burry redirected his pessimistic sentiment towards SOXX, a prominent semiconductor exchange-traded fund (ETF). 

Recent reports from Finbold signal mounting challenges for Burry, revealing significant unrealized losses in his bet against chipmakers. Today, on December 19, we explore the specifics of SOXX’s performance, shedding light on how much ground the popular semiconductor ETF has gained since Burry’s bearish bet.

SOXX soars 11% in a month

As well-known market data platform Barchart noted in its X post, it’s been a “tough year” for Michael Burry.

After exiting his bearish position in the S&P 500 and Nasdaq indexes at an estimated loss of 40% earlier this year, the ‘Big Short’ investor bought put options tied to the iShares PHLX Semiconductor ETF, or SOXX. 

The notional value of this bet was approximately $47.4 million and it is safe to say that this venture is not doing much better than Burry’s previous short, at least for the time being.

At the time when the legendary investor purchased the puts, on November 14, SOXX’s price was sitting at around $508. Now, on December 19, the ETF’s price per share is $567.7, representing a one-month gain of more than 11% and also its all-time high. 

SOXX ETF’s performance since Burry’s short. Source: Barchart

However, SOXX’s recent rise is hardly surprising. The chip ETF has been on an overall uptrend throughout the entire 2023, driven by the ongoing tech industry revolution led by artificial intelligence (AI). 

Because chips play a crucial role in powering the booming generative AI products, semiconductor companies like Nvidia (NASDAQ: NVDA), AMD (NASDAQ: AMD), and others are attracting substantial demand. 

As a result, the chip sector as a whole is up in 2023, propelling SOXX by around 65% year-to-date to a new peak. 

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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