- - From Big Short to Big Long: Michael Burry Bets Big on Three Stocks

Rich DupreyAugust 15, 2025 at 5:37 PM

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Michael Burry, famed for predicting the 2008 housing crash, shifted from bearish to bullish bets, acquiring calls and shares in Lululemon Athletica (LULU), Meta Platforms (META), and UnitedHealth Group (UNH) worth $522 million.

Scion Asset Management’s pivot from shorting tech like Nvidia to these three stocks signals rare optimism, but Burry’s contrarian history advises caution.

Investors must decide if following Burry’s “big long” bet on LULU, META, and UNH offers an opportunity or risks misjudging his complex strategy.

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Michael Burry, the hedge fund maverick immortalized in The Big Short for his prescient bet against the mid-2000s housing bubble, has once again shaken the investment world. Known for his contrarian moves and dire market warnings, Burry’s Scion Asset Management recently made a bold pivot, swapping bearish bets for bullish ones.

According to a recent SEC filing, Burry’s funds shed their previous put options and acquired call options in nine different stocks while buying direct stakes in five companies. Of those, just three stocks -- Lululemon Athletica (NASDAQ:LULU), Meta Platforms (NASDAQ:META), and UnitedHealth Group (NYSE:UNH) -- landed in both groups.

This dramatic shift from shorting tech giants like Nvidia (NASDAQ:NVDA) to embracing these names signals a rare optimism from the famously skeptical investor. But with Burry’s history of erratic portfolio moves and ominous predictions, investors are left wondering: Is this a golden opportunity to follow his lead, or a risky gamble?

Lululemon (LULU)

Lululemon, the athleisure giant, has been a darling of growth investors, but its stock has faced headwinds, down 48% year-to-date amid concerns over slowing demand and rising competition. Burry’s decision to buy both calls and direct shares in LULU stock suggests he sees undervaluation in its premium brand and loyal customer base. With a market cap of $24.6 billion and a forward P/E ratio of 12.7, LULU trades at a discount compared to its historical averages.

Its strong free cash flow of $1.2 billion annually and global expansion plans, particularly in Asia, offer growth potential. However, risks loom: consumer spending on discretionary items like high-end activewear could wane in a softening economy, and competitors like Alo Yoga are gaining traction.

Investors should approach LULU cautiously, as Burry’s bet may hinge on a rebound that’s not guaranteed. Consider a modest position if you believe in LULU’s long-term brand strength, but diversify to offset expected volatility.

Meta Platforms (META)

Meta, the parent of Facebook, Instagram, and WhatsApp, has surged 750% since its 2022 lows, and Burry’s call options and stock purchase signal confidence in its AI-driven future. With a market cap of almost $2 trillion and a forward P/E of 26, Meta is no longer the bargain it was, but its pivot to AI-powered advertising and metaverse investments keeps it relevant.

The company’s $32 billion in annual free cash flow and 3.5 billion daily active users underscore its dominance. Yet, regulatory scrutiny over data privacy and competition from TikTok pose risks.

Burry’s move suggests he sees Meta as a tech leader poised for further gains, possibly driven by AI advancements.

Investors should weigh Meta’s current torrid pace of growth against its high valuation and regulatory challenges. A buy could make sense for those bullish on tech’s long-term prospects, but temper expectations with a balanced portfolio to hedge against sector volatility.

UnitedHealth Group (UNH)

UnitedHealth remains a healthcare juggernaut despite its current troubles. The insurer caught Burry’s eye with both calls and direct shares, likely due to its long-term stability and scale.

With a market cap of $275 billion and $25.3 billion in free cash flow, UNH is a cash machine, ranked sixth globally in revenue. Its forward P/E of 18 is attractive for a defensive stock, especially as healthcare demand remains recession-resistant. Burry wasn't the only one buying UNH stock as Warren Buffett's Berkshire Hathaway (NYSE:BRK-A)(NYSE:BRK-B) also disclosed a $1.6 billion stake.

However, regulatory pressures and rising medical costs could squeeze margins, and the stock is down 40% year-to-date. Investors seeking stability might find UNH appealing, but should continue monitoring the insurer's regulatory risks and cost trends. Still, a buy could be prudent for long-term, defensive portfolios, but I'd avoid overexposure given its short-term uncertainties.

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