The Chinese stocks have outperformed their U.S. counterparts this year, reflected by the nearly 17% gain for the iShares MSCI China ETF (MCHI).

Famed investor Michael Burry has turned skeptical on stocks as his Scion Asset Management liquidated most equity holdings and increased its bearish bets on China in the first quarter.

The 13-F report filed with the SEC late Thursday also showed that the firm took a short position on Nvidia Corp. (NVDA), which is spearheading the artificial intelligence (AI) revolution.

Scion sold Alibaba (BABA), Baidu (BIDU), JD.com (JD), and PDD Holdings (PDD) in the first quarter, with the end-of-fourth-quarter holdings in these stocks at 150,000, 125,000, 300,000, and 75,000, respectively.

Instead, it bought puts in these stocks and Trip.com Group (TCOM).

A put contract grants a buyer the right to, but not the obligation to, sell an underlying asset at a predetermined price within a predetermined period. 

Alibaba stock slumped 7.57% on Thursday following the Chinese e-commerce giant’s fourth-quarter topline miss amid waning domestic demand.

The Chinese stocks have outperformed their U.S. counterparts this year, reflected by the nearly 17% gain for the iShares MSCI China ETF (MCHI).  

U.S. President Donald Trump singled out China in slapping hefty import tariffs in early April. However, both sides have recently agreed to suspend the reciprocal levies for 90 days.

Among the other shares liquidated by Burry’s firm are property and casualty insurer American Coastal Insurance (ACIC), medical devices company Bruker Corp. (BRKR), apparel manufacturers Canada Goose Holdings, Inc. (GOOS) and V.F. Corp. (VFC), and paper products company Magnera (MAGN).

Burry, who accurately predicted the 2008 U.S. housing market crash, also exited positions in healthcare companies HCA Healthcare (HCA), Oscar Health, Inc. (OSCR), and Molina Healthcare (MOH).

Reflecting his bearishness on Nvidia, the hedge fund manager placed 900,000 put options on the chipmaker. Nvidia shares, which hit an all-time high of $153.13 on Jan. 7, have retreated from that level, dragged by macroeconomic concerns and worries about tariff impact and the China chip curbs.

Nvidia stock’s strong gains this week, fueled by the China chip deal, have helped erase its losses for the year. It is currently up 0.4% year-to-date, although off 12% from its peak.

Burry, however, reposed confidence in cosmetics major Estee Lauder Companies (EL), beefing up his position to 200,000 shares from 100,000 at the end of the fourth quarter. Estee Lauder stock is down about 15% this year.

The SPDR S&P 500 ETF (SPY), an exchange-traded fund (ETF) that tracks the broader S&P 500 Index, is up 1.05% year-to-date. 

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