The character prototype from the movie 'The Big Short', Michael Burry, who predicted the mortgage crisis in the U.S., has opened a new position in Microsoft stocks and has also doubled down on the dip in software developer shares. The investor shared in a post on the Substack platform that besides Microsoft, he has increased his positions in MSCI, PayPal, and Adobe—stocks he only recently started accumulating. Burry believes that shares of software developers and fintech companies in the payments sector are oversold, even though the sector remains under pressure due to concerns about multiple contractions and potential headwinds from artificial intelligence.

Microsoft shares have dropped about 25% from their record high reached in July 2025, PayPal is approximately 37% below its peak, and Adobe has plummeted around 54%, according to CNBC.

"Shares of software developers were sharply sold off in response to earnings reports from IBM and ServiceNow, which investors interpreted as a signal of threats from AI," Burry wrote on Thursday. "I didn't sell any software company stocks."

The financier also indicated that he's increasingly concerned about the situation in the broader market after the S&P 500's rally to all-time highs despite ongoing geopolitical tension. Burry mentioned that he's expanding his bearish position: now put options make up about 5% of his portfolio. Specifically, he acquired put options on Nvidia shares with a strike price of $115, which gives him the right to sell at that price in case of a stronger decline. Currently, the chipmaker's stocks are priced at $208.26. On Friday, they rose to a record level, and the company's market cap returned to $5 trillion. Burry also added a put option on the iShares Semiconductor ETF with a strike price of $330 — at a current price of $461.6.

"Here's the scoop: we're witnessing a historic rally, something the US stock market has never seen before," wrote Burry. "We've never experienced such a steep, relentless climb to all-time highs. It's dizzying times. So, while I can't imagine the market forming a sharp peak and then crashing immediately, I've still loaded up on put options... while simultaneously betting on significantly undervalued stocks in software companies and payment services."

The investor noted that the iShares Semiconductor ETF has surged over 42% in just 17 trading days, as of the time of writing. Friday, April 25, marked the 18th day when the fund finished trading in the green. According to Burry, this is, "arguably, the most astonishing": even before the dot-com bubble peak in March 2000, growth over such a short period was weaker. The only stronger bounce was from the bottom in October 2002, but that followed an 80% crash. Therefore, this current surge, in the investor's opinion, has become the most powerful in the history of the semiconductor index.

#TurbulentWorldOfStocks #MarketCorrection

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