Let’s get straight to it. Michael Burry, best known for ‘The Big Short,’ is betting on Microsoft (NASDAQ:MSFT). The hedge fund manager has opened a new position in the tech giant, stepping into a name that has fallen about 12% so far in 2026. The disclosure came through his Substack updates and points to a view that the pullback may have created an opportunity.
Claim 30% Off TipRanks
New trading tool for NVDA bearsAt the same time, Burry is positioning defensively across the broader tech space. He has built bearish exposure using put options, including January 2027 puts on Nvidia (NASDAQ:NVDA), as well as January and March 2027 puts on the Invesco QQQ Trust (NASDAQ:QQQ). In addition, Burry is holding January 2027 put options on the iShares Semiconductor ETF (NASDAQ:SOXX), reinforcing a cautious stance on chip stocks.
So, it’s a ‘buy the dip, sell the rip’ move. Microsoft has lagged its Magnificent 7 peers this year, while Nvidia – now above a $5 trillion market cap – and the broader semiconductor group have benefited from strong demand linked to AI infrastructure, lifting expectations alongside share prices. When expectations climb that high, the margin for error becomes much narrower.
Looking more closely at Microsoft, Piper Sandler analyst Billy Fitzsimmons remains constructive despite the ongoing debate around spending. Fitzsimmons says there are “two core investor debates since last print,” including whether Microsoft needs to allocate more internal capacity after lighter Azure beats, and how Copilot’s growth fits into a landscape where “seat-based models are under pressure.”
At the same time, Fitzsimmons sees room for a more supportive tone from management in the near term, pointing to the potential for “F3Q call to guide capex higher and/or offer early comments on FY27 capex,” which could help shape expectations around investment levels. The analyst also highlights that Copilot adoption has improved year-to-date, adding that the company’s multi-model strategy “is a differentiator” as AI demand evolves.
Importantly, Fitzsimmons believes Microsoft holds a unique position within the ecosystem, noting that Azure is “one of few companies able to monetize both OpenAI and Anthropic’s growth,” giving it exposure across multiple leading AI platforms. That positioning, in his view, supports Microsoft’s standing as one of his “top picks.”
Fitzsimmons backs that view with a Buy rating on Microsoft shares, alongside a $500 price target, which suggests about 18% upside from current levels. (To watch Fitzsimmons’ track record, click here)
The broader Street is even more constructive. Microsoft currently boasts a Strong Buy consensus rating based on 36 analyst reviews, including 34 Buy and just 2 Hold ratings, with no Sell calls. The average 12-month price target stands at $577.05, implying ~36% upside from recent levels. (See MSFT stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.