Investor Michael Burry has reportedly closed his bearish position against Palantir Technologies while simultaneously making a long-term bullish bet on Microsoft. According to recent portfolio disclosures, the hedge fund manager exited his short position in Palantir and purchased call options on Microsoft with a December 2028 expiration, signaling a notable shift in his outlook on the technology sector.
Burry attracted significant attention earlier this year after publicly taking a bearish position against Palantir near the stock’s peak. Since then, Palantir shares have undergone a sharp correction, validating his short-term thesis as investors reassessed the company’s valuation following a powerful AI-driven rally. With the stock now substantially below its highs, Burry appears to have locked in profits by closing the position.
At the same time, his decision to establish a bullish options position in Microsoft suggests growing confidence in the software giant’s long-term prospects. Rather than purchasing common shares, Burry chose long-dated call options expiring in December 2028, giving him leveraged exposure to potential upside over the next several years while limiting the amount of capital committed upfront.
The move comes as Microsoft faces increased scrutiny from investors over its massive spending on artificial intelligence infrastructure. The company is investing hundreds of billions of dollars in AI data centers, cloud computing capacity, and next-generation software products, causing concerns that near-term profitability could come under pressure. Microsoft shares have recently experienced heightened volatility as investors debate whether these investments will ultimately generate sufficient returns.
Burry’s trade suggests he believes the market may be underestimating Microsoft’s long-term earnings potential despite current concerns. Through Azure, Copilot, enterprise software, and its expanding AI ecosystem, Microsoft remains one of the world’s largest beneficiaries of growing enterprise demand for artificial intelligence. If AI adoption continues accelerating over the coming years, the company could be well positioned to translate today’s infrastructure investments into substantial future cash flows.
The contrasting trades also illustrate Burry’s investment approach. While he has become well known for identifying overvalued companies and market bubbles, he has frequently shifted positions once valuations become more attractive. Closing the Palantir short while establishing a multi-year bullish position in Microsoft reflects a willingness to adapt as market conditions and risk-reward dynamics evolve.
Investors closely monitor Burry’s regulatory filings due to his successful prediction of the U.S. housing market collapse before the 2008 financial crisis. Although his trades do not guarantee future performance, they often generate significant interest because they provide insight into how one of Wall Street’s best-known contrarian investors views changing market opportunities.
