Michael Burry Disagrees With the AI Narrative, Buys Microsoft Stock and 2 Unexpected Names

Software stocks continue to lose their charm as artificial intelligence (AI) and chip stocks steal the limelight. The iShares Expanded Tech-Software Sector ETF (IGV) is down 19% so far this year despite a recovery in April. There seems to be no respite for software companies as AI models get better and better by the day. Yet, someone notable has just bet on a rebound for software stocks: Michael Burry.

Burry once called out AI stocks like Microsoft (MSFT) for poor accounting practices to inflate remaining performance obligations, but the famed investor is now backing the company. In his defense, MSFT stock is already down from the time he called out the AI backlog and capex concerns. At one point, MSFT stock was down as much as 35%.