Michael Burry has gone long on Microsoft (MSFT), adding one of the world’s largest companies to a growing list of beaten-down software bets.
Burry disclosed the position in his Substack newsletter, Cassandra Unchained, on April 23. He didn’t reveal the size of the stake, but confirmed he “gone long on Microsoft” and has analysed the business “forensically.”
The timing wasn’t random. Software stocks dropped hard that day after IBM and ServiceNow delivered disappointing earnings guidance. Markets read it as a warning sign that AI is eating into enterprise software demand.
Burry read it differently. He called the selloff an overreaction and said he sees an opportunity in what he described as “bombed out software and payment stocks.” He also confirmed he didn’t sell a single software position during the dip.
This is classic Burry — buying when others are heading for the exit.
Microsoft has had a rough run. The stock is down roughly 25% from its July 2025 record high and about 13% year-to-date. It bounced around 18% off recent lows before Burry’s post, but is still well below its peak.
At a forward price-to-earnings multiple of around 26x, it’s trading well below its five-year median P/E of 34x, according to GuruFocus.
For Burry, that’s the entry point. He’s not chasing an AI story — he’s buying a cash-flow machine at a discount to its own history.
Microsoft’s commercial cloud segment, which covers Azure, Office 365, and Dynamics, runs on subscription-based recurring revenue. Azure is one of only two true hyperscale cloud platforms in the world. The company generates tens of billions in free cash flow annually.
Burry’s argument is straightforward: the business isn’t broken, the price just reflects fear more than fundamentals.
Microsoft isn’t a one-off. Over the past few weeks, Burry has been methodically buying across the software sector.
He added Adobe (ADBE), Autodesk (ADSK), and Veeva Systems (VEEV) to his portfolio. He’s also increased positions in MSCI and PayPal.
His thesis across all of them is similar — AI disruption fears have pushed quality software names down to valuations that don’t reflect their actual earnings power.
Most institutional investors have been moving the other way, selling software on concerns that AI tools will undercut traditional software business models. Burry’s Substack is built around taking the other side of that trade.
Wall Street analysts aren’t far off from Burry’s view on Microsoft specifically. The stock carries a consensus Strong Buy rating from 37 analysts — 34 Buy recommendations and three Holds. The average price target sits at $581.61, implying around 56% upside from current levels.
Burry initiated his Microsoft position on April 23, 2026, the same day IBM and ServiceNow’s guidance triggered the broader software selloff.
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