KEY POINTS
- Michael Burry, the investor from the film The Big Short, spent 2026 betting that AI stocks would fall.
- Then, on 25 June, he surprised everyone by betting Microsoft would rise, using long-term options that only pay off if the stock nearly doubles by 2028.
- His simple idea: buy good companies that have been sold off too hard, and bet against pricey, popular ones.
- The same idea points to four ASX tech stocks that have been hit hard and may be worth a look.
You may know Michael Burry from the film The Big Short. He is the investor who saw the 2008 housing crash coming and made a fortune betting against it. For most of 2026, he has been betting that AI stocks had run too far and were due to fall. So it surprised a lot of people when, on 25 June, he did the opposite and bet that Microsoft shares would rise.
The way he did it shows real conviction. Instead of simply buying shares, Burry bought long-dated “LEAP” call options that only pay off if Microsoft almost doubles to around US$700 by December 2028. With the stock recently near US$360, well off its highs, this is a bold, high-risk bet on a slow recovery, not a quick dip-buy.
Why Did Michael Burry Suddenly Start Buying?
Burry’s idea is simpler than it sounds. His trades this year follow a clear pattern: he buys beaten-down companies the crowd has given up on, and bets against pricey, crowded favourites like Nvidia and Palantir. In short, buy what fear has made too cheap, sell what excitement has made too pricey.
His Microsoft bet says he thinks the recent tech selloff was driven by panic, not by businesses going bad. But there is a catch: Burry is often early, and being early can look the same as being wrong for a long time. So the lesson is how to think, not which trades to copy. It also changes the question for us: instead of “is AI a bubble?“, we should ask “which good ASX companies got dumped in the panic?”
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4 Beaten-Down ASX Tech Stocks That Fit His Thinking
Australian tech has had its own rough patch, as investors worried that AI could replace or undercut software companies. Here are four names caught in the selloff.
Xero (ASX:XRO) makes accounting software, so it is right in the firing line of fears that AI could do the same job. The shares fell to multi-year lows before bouncing back recently. But it is still a strong, growing business with loyal customers, which makes it look oversold rather than broken.
NextDC (ASX:NXT) runs Australia’s biggest data centres, the buildings that power AI. It drops whenever investors worry about AI spending, even though demand for its space keeps rising. The business looks healthy; the price simply got cheaper.
WiseTech Global (ASX:WTC) has fallen a long way from its highs. Much of that is a cloud over its chairman rather than the business itself, which still earns strong margins from software used across global logistics. So this looks more like headline risk than broken foundations, though a recent earnings miss means investors should stay alert.
Megaport (ASX:MP1) provides the connections that link businesses to cloud and data centres, so it moves with the same AI trend. It has been sold down but should benefit if AI demand keeps growing.
The point is not to rush out and buy. Burry’s move is a reminder to tell the difference between a good company on sale and one that is genuinely in trouble. Xero and NextDC look like quality caught in the panic, while WiseTech is more of a headline-risk story to watch closely.
