Michael Burry, the investor famed for his "Big Short," has signaled a noteworthy shift by reportedly buying shares in software giants Adobe, Autodesk, and Veeva.
This move appears to be a classic value play, targeting profitable, cash-rich companies at a time when their stock prices are historically low. For instance, Adobe is trading at a forward Price-to-Earnings (P/E) ratio near its all-time low, while Autodesk and Veeva are also near their cycle lows. The core idea is that these depressed valuations don't reflect the companies' true strength, setting the stage for a potential rebound or re-rating.
So, what created this opportunity? First, the macroeconomic environment has been tough on software stocks. Recent inflation data for March 2026 came in hotter than expected, and minutes from the Federal Reserve's latest meeting suggest interest rate hikes could still be on the table. Higher interest rates tend to hurt growth-oriented sectors like software, pushing their valuations down. For a contrarian investor like Burry, this widespread pessimism can be an ideal entry point.
Second, while the market is punishing these stocks, the companies themselves are performing well. Adobe recently posted record quarterly revenue, driven by its AI products. Autodesk provided strong guidance for its future free cash flow, and Veeva not only beat earnings expectations but also announced a massive $2 billion stock buyback program. This disconnect—strong business performance versus a weak stock price—is exactly the kind of setup a value investor looks for.
Finally, this trade fits perfectly within Burry's broader investment philosophy. He has been publicly skeptical of the AI hype, even placing bets against companies like Oracle. By buying Adobe, Autodesk, and Veeva, he seems to be executing a "barbell" strategy: shorting what he sees as overhyped AI narratives while buying established "cash machines" at a discount. It's a bet on tangible profits over speculative growth.
While we await official confirmation from his 13F filing in mid-May, Burry's reported move is a clear signal: he sees deep value in high-quality software that the rest of the market has overlooked due to macro fears and a sector-wide de-rating.
- Forward P/E (Price-to-Earnings) Ratio: A valuation metric that uses a company's stock price and its estimated future earnings per share. A low forward P/E can suggest a stock is undervalued.
- De-rating: When investors become less willing to pay a high price for a company's stock relative to its earnings, causing its valuation multiple (like the P/E ratio) to decrease.
- 13F Filing: A quarterly report required by the U.S. Securities and Exchange Commission (SEC) from institutional investment managers with over $100 million in assets, disclosing their equity holdings.