Key points
- Michael Burry bought Microsoft (MSFT) December 2028 LEAP calls, a rare bet that the stock keeps climbing.
- He sold part of, not all of, his bet against Palantir (PLTR), covering half at $107.15 while still betting the stock falls.
- Microsoft (MSFT) was up about 4% with his disclosure cited as the reason.
Michael Burry built his name betting against things. He shorted the housing market before 2008, the trade that became "The Big Short," and more recently he has been betting against Nvidia (NVDA) and Palantir (PLTR). So it turned heads when, in a post on his Substack, he disclosed a big, long-dated bet that Microsoft (MSFT) shares would rise. This morning Microsoft is up about 4 percent, and Burry's name is getting at least part of the credit.
What Burry actually bought
Burry disclosed that he bought Microsoft December 2028 LEAP calls, with strike prices in the low $700s. A LEAP is simply a long-dated call option, the right to buy a stock at a set price far in the future, in this case late 2028. It is a patient, multi-year bet that Microsoft heads a lot higher over the next few years, not a quick trade.
His logic was straightforward. He thinks the $350 area for Microsoft is "a good place to buy the stock," but instead of buying shares he used the LEAP calls, which he called inexpensive relative to his outlook. The same post showed him adding to JD.com (JD), Adobe (ADBE), and Fiserv (FISV), and selling Alibaba (BABA), reportedly for tax-loss reasons.
It matters because of who is making the bet. When one of the market's most famous bears makes a years-long bet that a megacap stock will keep rising, people pay attention, even if they disagree with him.
The Palantir part, with one correction
There has been some confusion about his Palantir trade, so here is the accurate version. Burry covered half of his bet against Palantir, at $107.15. He did not close most of it, and he is not done betting against the company. He still holds put options on Palantir and still expects the stock to fall, recently calling it a "sand castle" worth less than $50 a share.
He took some profit on a position that was working and reduced it, while still betting Palantir falls. Selling part of a bet against a stock is not the same as betting it rises.
Why Microsoft is up this morning
Microsoft is trading around $367, up about 4 percent. On a mixed morning, with parts of big tech lower and a hotter inflation reading in the background, Microsoft standing out points to a stock-specific reason, and the Burry disclosure is the one the market is talking about.
One caveat, though: a single investor's options bet does not move a company worth more than $2.7 trillion on its own. The headline helps sentiment, but Microsoft also has its own tailwind, the rotation into steady, asset-light software that we covered in why Microsoft was green while tech sold off. So Burry's name is one piece of today's move, not all of it.
How to think about it
This is a public disclosure, not a recommendation. And it helps to know how Burry operates. He is a contrarian who tends to be early, sometimes by years, and he has been wrong before. His Microsoft calls run all the way to December 2028, which tells you he is thinking in years, not days. If a famous name tempts you to act fast, the timeline alone is a reason to slow down.
For what it is worth, Palantir is also up about 4 percent today, so the market is not treating his trim as a verdict either way.
Bottom line
The investor best known for betting against overvalued stocks made a rare, multi-year bet that Microsoft would rise, using long-dated calls, and sold part of, but not all of, his bet against Palantir. Microsoft is higher this morning with his name attached. Read it as one famous contrarian showing his hand, not as a reason to do anything yourself.
Sources
- Yahoo Finance, Michael Burry buys long-dated Microsoft calls, adds to JD and Adobe, trims Palantir short
- GuruFocus, Microsoft (MSFT) stock rises as Michael Burry makes strategic move
- TipRanks, Michael Burry makes big tech bets and sells Alibaba
This article is for general informational purposes only and is not investment advice. Prices are intraday and approximate, and will move. Always do your own research and consider speaking with a licensed financial professional before making any investment decision.
