Nvidia shares fell nearly 4 % after renewed US-China trade tensions and reports of a bearish bet by “Big Short” investor Michael Burry. There is growing caution in the AI-driven rally that has powered markets through 2025.
Nvidia’s stock took a hit this week, falling nearly 4 % as traders reacted to a combination of renewed trade concerns and a notable move from a well-known market figure. Reports that “Big Short” investor Michael Burry had taken a large bearish position against the chipmaker added fuel to the sell-off, briefly wiping billions off its market value.
The pullback comes just days after Nvidia’s valuation touched the US $5 trillion mark, a milestone that placed it among the most valuable companies in the world. Yet the latest developments have reminded investors that even market darlings are not immune to sudden shifts in sentiment.
China Restrictions Add Pressure
One factor weighing on Nvidia’s share price is the ongoing tension between the United States and China over advanced semiconductor exports. Washington’s tightening of chip-export rules has already restricted the sale of some of Nvidia’s most powerful processors to Chinese firms, a region that has been one of its biggest growth markets.
Analysts say the company has been forced to redirect production towards other regions, including the Middle East and Europe, while also designing new products that meet export-compliance standards. The uncertainty over how long the restrictions will last has made traders more cautious about Nvidia’s near-term outlook.
Big Short’s Bearish Signal
The news that hedge-fund manager Michael Burry, made famous by his prediction of the 2008 financial crisis — has reportedly taken put options on Nvidia added an extra layer of intrigue. While the size of the position has not been publicly confirmed, the move sparked chatter across trading forums and social media.
For many market participants, such a high-profile bearish bet on a leading technology stock served as a reminder that valuations across the AI sector remain stretched. Nvidia’s meteoric rise over the past two years has been driven by booming demand for AI chips, but the market’s expectations may now be testing their limits.
Wider Tech Market Reaction
Nvidia’s decline rippled across the broader technology sector, with shares of other major chipmakers such as Advanced Micro Devices and Taiwan Semiconductor also edging lower. The tech-heavy Nasdaq Composite dipped modestly in response, reflecting a degree of investor caution.
Despite this, sentiment towards AI-linked companies remains broadly positive. Many traders see the current pullback as a healthy pause following months of strong gains, rather than the start of a deeper correction.
Why It Matters for Traders
Nvidia’s moves often set the tone for tech sentiment globally. A sustained downturn could influence broader risk appetite, affecting everything from tech-heavy indices to retail portfolios and even certain currency pairs tied to equity flows.
For traders, the focus now shifts to how the stock performs in the coming sessions, particularly whether it can reclaim recent highs or if selling pressure persists ahead of upcoming U.S. inflation and earnings data.
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