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Michael Burry doubles down on Lululemon while maintaining a cautious short position on Nvidia ahead of earnings

Michael Burry is positioning his portfolio with a contrarian bet on Lululemon, which he describes as "screaming cheap" despite a majority of Wall Street analysts maintaining a "Hold" rating. Burry has nearly doubled his stake in the apparel retailer, which now accounts for 17.4% of his holdings. While the market remains cautious on Lululemon's recent revenue declines in the Americas, Burry argues that the company's tangible book value per share has doubled over the last three years, making it a more compelling relative value than many large technology stocks. Simultaneously, Burry is expressing caution regarding the artificial intelligence leader Nvidia. Although he acknowledges the company's operational strength and blockbuster earnings, he believes the stock is "wildly undervalued" on paper at a forward price-earnings multiple of about 24x. However, Burry maintains a significant short position, wagering that Nvidia's current monopoly and extraordinary margins may not last indefinitely. To hedge against potential earnings-driven rallies, Burry purchased December call options, balancing his skepticism regarding the stock's long-term valuation with the company's current momentum.

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