Key Takeaways
- Through his Substack publication Cassandra Unchained, Michael Burry revealed he’s established a long position in Microsoft
- The purchase followed a significant April 23 software sector downturn triggered by disappointing outlooks from IBM and ServiceNow
- According to Burry, concerns about AI disrupting traditional software are excessive and exaggerated
- Microsoft has declined approximately 25% from its July 2025 high and roughly 13% for the year
- Burry simultaneously expanded holdings in Adobe, Autodesk, Veeva Systems, MSCI, and PayPal
Michael Burry has established a long position in Microsoft (MSFT), incorporating the tech behemoth into an expanding portfolio of discounted software investments.
The investor announced the stake through his Substack publication, Cassandra Unchained, on April 23. While the exact position size remains undisclosed, Burry confirmed he’s “gone long on Microsoft” following what he described as a “forensic” examination of the company.
The purchase timing proved deliberate. Software equities experienced substantial losses that session following lackluster earnings projections from IBM and ServiceNow. Market participants interpreted these results as evidence that artificial intelligence threatens conventional enterprise software revenue streams.
Burry’s interpretation diverged sharply. He characterized the downturn as excessive market reaction and identified value in what he termed “bombed out software and payment stocks.” Notably, he maintained all existing software holdings throughout the volatility.
This represents quintessential Burry strategy — accumulating positions while mainstream investors capitulate.
The Case for Microsoft at Current Levels
Microsoft has experienced significant headwinds recently. Shares have retreated approximately 25% from the July 2025 all-time high and stand roughly 13% lower year-to-date. Despite recovering about 18% from recent troughs before Burry’s disclosure, the stock remains considerably below previous peaks.
Trading at a forward P/E ratio near 26x, the valuation sits meaningfully below its five-year median multiple of 34x, per GuruFocus data.
For Burry, this represents an attractive entry opportunity. Rather than speculating on AI narratives, he’s acquiring a proven cash-generation business at a historical valuation discount.
Microsoft’s commercial cloud division — encompassing Azure, Office 365, and Dynamics — operates on predictable subscription revenue models. Azure represents one of just two legitimate hyperscale cloud infrastructures globally. The corporation produces tens of billions in annual free cash flow.
Burry’s investment thesis remains direct: the underlying business fundamentals remain intact, while current pricing primarily reflects market anxiety rather than operational reality.
A Broader Software Sector Accumulation Strategy
Microsoft represents just one component of Burry’s recent activity. Throughout recent weeks, he’s systematically accumulated positions across the software landscape.
He’s initiated positions in Adobe (ADBE), Autodesk (ADSK), and Veeva Systems (VEEV). Additionally, he’s expanded existing stakes in MSCI and PayPal.
His rationale remains consistent across these investments — excessive AI disruption anxiety has compressed valuations of high-quality software companies to levels disconnected from their fundamental earning capacity.
Most institutional capital has flowed in the opposite direction, liquidating software positions amid fears that AI-powered tools will erode established software business frameworks. Burry’s Substack essentially documents his contrarian positioning against this sentiment.
Sell-side analysts largely align with Burry’s Microsoft assessment. The stock maintains a consensus Strong Buy rating from 37 Wall Street analysts — comprising 34 Buy ratings and three Hold ratings. The mean price objective stands at $581.61, suggesting approximately 56% potential appreciation from present levels.
Burry opened his Microsoft position on April 23, 2026, coinciding precisely with the software sector selloff precipitated by IBM and ServiceNow’s cautious forward guidance.
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