🐻 The Big Short Guy Is Buying

You probably opened something powered by AI before your first coffee this morning. Millions of people do. Almost none of them own a piece of it.

That's been the catch with the AI boom — the biggest gains went to insiders and venture funds, while the companies actually building the frontier stayed private and out of reach.

That's starting to change. A wave of AI IPOs is forming, and a few are shaping up to be among the most retail-accessible mega-listings in years — the rare chance to get in near the ground floor instead of reading about the gains after the fact.

Our free briefing lays out the timeline, the access window, and the filing risk most investors will miss. No credit card. Sent straight to your inbox.

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Michael Burry spent his quarter buying gambling stocks and yoga pants.

Then he went back and stacked more bets against the AI chip trade.

Thursday's Substack post from the man who shorted the housing market came with one line that sets the tone: "All buys and additions to positions, no sells."

So what does a professional pessimist buy when he's feeling generous? 👇

Four names got bigger.

DraftKings $DKNG ( ▼ 1.01% ) at around $23.40, which he now calls a "larger position" alongside Flutter Entertainment $FLUT ( ▲ 2.29% ). Sports betting, bought after the market lost interest.

Zoetis $ZTS ( ▲ 1.66% ) at around $76, a full position. Animal medicine. Boring in the way that usually pays.

Lululemon $LULU ( ▼ 0.51% ) at around $118, also a full position. His words: "this is a basing/consolidation after a long fall."

That phrase is doing the heavy lifting. He's buying things that already fell and then stopped falling.

His reasoning: the moves are a "turnover into stronger hands," and all three look "rather de-risked at these prices," particularly for long-term investors.

Same investor, same day, opposite direction.

He added to his QQQ $QQQ ( ▲ 0.65% ) puts expiring Jan. 15, 2027, in the high 500s strike range. That's a wager against the Nasdaq's heaviest hitters.

He added to his Nvidia $NVDA ( ▲ 2.93% ) puts expiring Dec. 18, 2026, in the low 100s strike range.

Then he grew his Micron $MU ( ▼ 5.9% ) short at around $880 and his SOXX semiconductor ETF $SOXX ( ▲ 0.07% ) short at around $506.

Tesla $TSLA ( ▲ 0.76% ) and Palantir $PLTR ( ▲ 0.65% ) went untouched. Apparently they're already sized exactly how he likes them.

The portfolio is a barbell. Bruised consumer names on one end, a bet against AI hardware on the other.

Now look at the expiry dates. Dec. 2026 and Jan. 2027. Those are long fuses.

Being early is expensive, and he's bought himself well over a year of being early before he has to be right.

Here’s what people aren’t paying attention to. We can see his strikes and expiries, not his position sizes. "Burry is short Nvidia" could mean a conviction bet or a small hedge on a portfolio he otherwise likes.

And the man does not exactly have a clean record of calling tops on time. Being famous for one enormous correct call is a different thing from being reliably correct.

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Consumer Staples gained 1.7% last quarter. The market gained 15%.

The safe, boring, "people always need toothpaste" sector got lapped nearly nine times over by everything else.

Tariffs did that. And now they’re sorting the entire consumer world into two piles: companies that can pass the cost on, and companies eating it.

The rule is simple. If you build physical things out of parts from other countries, you're exposed.

Ford $F ( ▼ 1.21% ) and General Motors $GM ( ▲ 0.52% ) sit right in the blast radius. Both carry strong current profitability grades, but their supply chains run on imported components and finished vehicles.

Tariffs hit them at the input, before a single car reaches a forecourt.

Autos and apparel carry the heaviest import exposure inside Consumer Discretionary, the sector $XLY ( ▲ 3.29% ) tracks. That's the stuff people skip when the wallet feels light.

Services businesses barely notice. You can't import a hotel room.

Seven names earned A+ Profitability Grades heading into Q2: Airbnb $ABNB ( ▼ 0.37% ), Amazon $AMZN ( ▲ 15.32% ), Booking Holdings $BKNG ( ▼ 0.18% ), Home Depot $HD ( ▼ 0.42% ), Lowe's $LOW ( ▼ 1.08% ), McDonald's $MCD ( ▲ 0.82% ) and Marriott $MAR ( ▼ 0.71% ).

Travel, hospitality, dining, platforms. All running on domestic demand, all structurally shielded from import costs.

Over in staples ($XLP ( ▼ 0.49% ), the stuff you buy whether you like it or not), brand strength is doing the sorting. Beverage companies with strong brands and international reach have absorbed inflation better than everyone else.

The sector label is doing a lot less work than it used to. "Staples" and "discretionary" tell you almost nothing about tariff risk right now.

Two questions do the real work. Can this company raise prices without losing customers? And where does its stuff physically come from?

A domestic services name inside discretionary can be safer than a globally sourced manufacturer inside staples. Feels backwards.

And those overbought names deserve a closer look. When a stock is priced for perfection going into earnings, weak tariff guidance can take a serious chunk out of it.

Tesla has been told to get its China business ready to leave.

Not a supply-chain tweak. The whole thing, carved out and set aside, according to a Wall Street Journal report on Thursday citing someone close to the discussions.

Why would Elon amputate the most productive limb of his car company? Because he wants to bolt it onto a rocket company.

China has historically built more than half of every Tesla on the planet, with capacity for over 950,000 vehicles a year.

That's the piece now being lined up for a split.

For context, 950,000 cars a year is roughly the entire annual output of Italy's car industry, coming out of factories Tesla owns outright.

SpaceX is a major US defence contractor. National security work, satellite programmes, the kind of business that comes with badge readers.

Tesla owns wholly-owned factories inside China.

Merge them and you'd have a Pentagon supplier running its own Chinese manufacturing empire. Regulators in Washington and Beijing would both need a sit down and a cold flannel.

Hence the pre-emptive carve-out. Separate the awkward bit first, then talk about the merger.

He was asked about a Tesla-SpaceX merger directly on the Q2 2026 earnings call.

His answer: the two companies keep colliding, especially on Terafab, which he called a gigantic project. Then he added that "we can't talk about combining companies" on an earnings call, and that it has to go through the appropriate process.

Which is corporate for "yes, obviously, but not here."

SpaceX went public last month in a record $1.7T IPO and closed Thursday valued at $1.48T.

Tesla sits at $1.22T.

Stick them together and you get roughly $2.7 trillion of Elon under one ticker. That's more than the entire annual economic output of Italy, wrapped in a single man's mood swings.

If you hold $TSLA ( ▲ 0.76% ), the thing you own could change shape. A merged entity would be part carmaker, part defence-adjacent space business, minus the factories that build most of its cars.

Two questions decide whether that's good or grim for shareholders:

And the boring caveat that matters most: this is a report about preparation, not a signed deal. Executives being told to plan for something is not the same as it happening.