This article first appeared on GuruFocus .
Michael Burry ( Trades , Portfolio ) has started taking profits on one of his biggest bearish technology bets.
The famed investor disclosed that he sold 25% of his put options on the VanEck Semiconductor ETF ( NASDAQ:SMH )after a sharp selloff across U.S. chip and technology stocks.
But that does not mean Burry has turned bullish.
He said the remaining SMH put position has become very large,suggesting the trade still represents a major part of his bearish exposure.
That distinction matters because SMH owns many of the biggest beneficiaries of the AI boom, including Nvidia ( NASDAQ:NVDA ), Taiwan Semiconductor ( NYSE:TSM ), AMD ( NASDAQ:AMD ), Broadcom and Micron ( NASDAQ:MU ).
The timing also makes sense.
SMH plunged about 11.2% on November 5, while the Nasdaq Composite fell 5.5% and the QQQ ETF dropped 6.5%, giving bearish positions a significant opportunity to lock in gains.
Burry had previously concentrated much of his bearish exposure into puts on SMH and the Nasdaq-100 with expirations in 2027, while arguing that the AI trade could be approaching a major market top.
He is also still holding puts on Palantir ( NASDAQ:PLTR ), Oracle ( NYSE:ORCL ), Caterpillar and QQQ, according to his latest disclosure.
At the same time, Burry is not broadly bearish on every stock.
He disclosed that he added to his position in MercadoLibre, buying shares below $1,500 after the company reported earnings.
Investor Takeaway
I think the key point is that Burry is trimming risk, not reversing his thesis.
Selling 25% of the SMH puts after an 11% one-day plunge is classic profit-taking.
The more important signal is that he still describes the remaining position as very large and continues to hold several other bearish technology bets.
That means investors should not read this as Burry calling a bottom in semiconductors.
Instead, it suggests he believes the selloff has already moved far enough to justify locking in some gains while still expecting further downside.
For investors, the key things to watch are whether Burry trims more of the position, Nvidia's next earnings report, semiconductor valuations, AI capex expectations, and whether the broader Nasdaq correction deepens from here.
He is taking some money off the table.
He is not leaving the trade.
