Key Takeaways
- Michael Burry acquired long-dated call options on Microsoft (MSFT) expiring in December 2028 with strike prices around $700
- MSFT hit a 52-week bottom at $349.20 on June 25, marking a decline exceeding 23% for the year
- Burry characterized the $350 price point as an attractive entry, attributing the decline to “technical pressure, not fundamental” weakness
- Following disclosure of Burry’s trade, MSFT surged 5.2% on June 26 amid sector rotation away from semiconductor stocks
- Analyst consensus rates MSFT as a strong buy with a mean price target of $562.10, implying approximately 51% upside potential
Michael Burry, renowned for his prescient bet against subprime mortgages ahead of the 2008 financial crisis, has established a significant long-term bullish position in Microsoft (MSFT).
Burry revealed on June 25 that he had purchased LEAP (Long-term Equity Anticipation Securities) call options on the technology giant set to expire in December 2028, featuring strike prices in the low $700 range. That same trading session saw Microsoft bottom out at a 52-week low of $349.20, following a prior close of $365.46.
For these options contracts to generate returns, Microsoft would need to climb nearly 100% from those levels and substantially exceed its historical closing peak of $538.66āall within the next two and a half years.
This isn’t a short-term rebound play. It represents a bold, long-horizon bet that Microsoft will reach unprecedented price levels by the end of 2028.
Burry’s thesis was straightforward. According to TipRanks, he stated that “the $350 level for Microsoft is a good place to buy,” noting that longer-dated options appeared attractively priced given his outlook. He characterized the broader selloff in software stocks as driven by “technical pressure, not fundamental” factorsāessentially forced liquidation rather than deteriorating business quality.
This wasn’t Burry’s first Microsoft position. He had already established a long position in April when shares were similarly under pressure. The June transaction significantly amplifies that bet through a more substantial options framework.
The Factors Behind Microsoft’s Decline
Microsoft has shed over $1 trillion in market capitalization since peaking in October 2025, tumbling from its record close of $538.66 to approximately $365. Year-to-date, the stock has declined roughly 23%.
The pullback stems primarily from the company’s capital expenditure plans. Microsoft is projected to deploy approximately $190 billion in capital investments this fiscal year, with substantial portions allocated to artificial intelligence infrastructure and the high-bandwidth memory chips required to power these systems. A worldwide shortage of memory components has inflated these hardware costs.
Investors balked when calculating the implications of these massive outlays. The retreat also reflected a broader exodus from richly-valued AI-related equities throughout a turbulent 2026 market environment.
MSFT Rallies Following Burry’s Disclosure
Microsoft shares gapped up 4.09% at the open on June 26, the trading day following Burry’s position disclosure. The stock concluded the session with a 5.2% gain, even as the S&P 500 remained essentially flat and the Nasdaq Composite declined 0.7%.
The rally appeared driven by capital flows shifting from semiconductor names into software companies. No Microsoft-specific catalysts or announcements emerged that day.
Burry executed several additional portfolio adjustments on June 25. He closed half of his short position in Palantir (PLTR) at $107.15, increased holdings in JD.com (JD) and Adobe (ADBE), and liquidated his Alibaba (BABA) position citing tax considerations, according to Stocktwits.
His 2026 performance has been uneven. While his Palantir short has proven profitableāPLTR is down over 33% year-to-dateāhis Nvidia (NVDA) short has produced inconclusive results. His long position in Lululemon (LULU) has declined approximately 45%, per Finbold.
Regarding the Microsoft call option trade specifically, Wall Street analysts largely share the bullish outlook. The stock maintains a strong buy consensus rating with a mean price target of $562.10, according to TipRanks. Stifel analyst Brad Reback represents a notable exception with a hold rating and $400 price target.
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