Key Takeaways
- Michael Burry purchased long-dated December 2028 call options on Microsoft (MSFT) stock with strike prices in the low $700 range
- MSFT hit a 52-week bottom of $349.20 on June 25, declining more than 23% for the year
- Burry described the $350 price point as “a good place to buy,” viewing the decline as “technical pressure, not fundamental”
- Microsoft (MSFT) stock surged 5.2% on June 26 after Burry’s position became public, amid sector rotation from chip makers to software companies
- Analysts maintain a strong buy rating on MSFT with a consensus target of $562.10, representing approximately 51% upside potential
Michael Burry, the legendary investor who profited from betting against subprime mortgages ahead of the 2008 financial crisis, has taken a significant long position on Microsoft (MSFT) stock.
Burry revealed on June 25 that he had acquired December 2028 long-term equity anticipation securities (LEAP) call options on the tech giant, selecting strike prices in the low $700 range. That same trading day, Microsoft (MSFT) stock bottomed at $349.20, marking its lowest point in a year. The previous close stood at $365.46.
For these options to generate profits, Microsoft stock would need to essentially double from that bottom and significantly surpass its all-time closing high of $538.66 — and accomplish this before December 2028.
This isn’t a short-term momentum play. Burry is making a strategic bet spanning two and a half years that Microsoft will reach unprecedented price levels.
Burry’s investment thesis was straightforward. According to TipRanks, he stated that “the $350 level for Microsoft is a good place to buy,” noting that longer-dated options appeared attractively priced given his forecast. He characterized the software sector’s recent weakness as “technical pressure, not fundamental” — driven by forced liquidation rather than deteriorating business fundamentals.
This wasn’t Burry’s first Microsoft move in 2026. He had already established a long position in April when shares were similarly pressured. The June transaction significantly amplifies that exposure through a substantially larger options framework.
The Reason Behind Microsoft’s Decline
Microsoft has shed over $1 trillion in market capitalization since peaking in October 2025, falling from its record close of $538.66 to approximately $365. Year-to-date, the stock has declined roughly 23%.
The decline stems primarily from the company’s aggressive investment strategy. Microsoft is projected to allocate approximately $190 billion toward capital expenditures this fiscal year, with substantial portions funding AI infrastructure and the specialized memory chips required to power these systems. A worldwide shortage of memory components has inflated hardware costs.
Investors reassessed their positions after analyzing these expenditure figures. The pullback also reflected broader market sentiment, as participants exited richly valued AI-related equities throughout a turbulent 2026.
Microsoft Stock Rallies Following Burry’s Position Disclosure
Microsoft stock gapped up 4.09% at the opening bell on June 26, immediately after news of Burry’s options purchase emerged. Shares closed the day with a 5.2% gain, despite the S&P 500 finishing essentially unchanged and the Nasdaq Composite dropping 0.7%.
The rally appeared connected to capital flows shifting away from semiconductor stocks toward software companies. No Microsoft-specific announcements or earnings news accompanied the price movement.
Burry executed several additional portfolio adjustments on June 25. He closed approximately half his Palantir (PLTR) short position at $107.15, increased holdings in JD.com (JD) and Adobe (ADBE), and liquidated his Alibaba (BABA) position citing tax considerations, according to Stocktwits.
His 2026 performance shows varying results. The Palantir short has generated profits, with PLTR declining over 33% year-to-date. His Nvidia (NVDA) short has produced mixed outcomes without a definitive gain or loss. Meanwhile, his Lululemon (LULU) long position has fallen approximately 45%, Finbold reports.
Regarding the Microsoft options trade specifically, Wall Street analysts generally share Burry’s optimistic outlook. The stock maintains a strong buy consensus rating with analysts projecting an average price target of $562.10, according to TipRanks data. Stifel analyst Brad Reback represents a contrarian view with a hold rating and $400 price target.
