'Big Short' Michael Burry Eyes Salesforce Dip — 'Software Selloff Is Fear-Driven Opportunity'

Michael Burry, the real-life investor immortalized in the film 'The Big Short,' has identified the recently battered software sector as a buy-the-dip opportunity. He specifically named Salesforce (CRM) as a top investment candidate, arguing that the current drawdown reflects market misreading and technical supply-demand pressures rather than any fundamental deterioration in the underlying businesses.

"Falling Prices Trigger More Selling — A Vicious Cycle"

In a recent Substack post, Burry described the ongoing software correction as a 'reflexive positive feedback loop.' His thesis: declining share prices are amplifying debt stress in private credit markets tied to the software sector, which in turn triggers further forced selling — creating a self-reinforcing downward spiral.

That said, Burry does not believe this technical pressure will persist long enough to impair intrinsic value. In his view, the market is overreacting to perceived debt risk, indiscriminately dragging down fundamentally sound software companies in the process.

Why Salesforce? Earnings and Cash Flow Hold Up

Salesforce is Burry's marquee pick. The company's most recent earnings provided reassurance on key metrics: it posted record revenue and free cash flow (FCF) for fiscal year 2026, while signaling a potential return to double-digit growth going forward.

Market projections suggest Salesforce's revenue could grow to approximately $60.6 billion by 2030. This is viewed not as speculative hype, but as a credible, earnings-backed growth narrative that remains firmly intact.

Wall Street Also Constructive — Gap to Price Targets Stands Out

Wall Street sentiment is broadly aligned. A majority of major analysts maintain Buy ratings on Salesforce, with a consensus price target of around $262 — implying meaningful upside from current trading levels.

Valuation re-rating potential is also part of the conversation. Analysis suggests that applying a conservative 12x FCF multiple could yield returns in the 60% range over three years, while a recovery to 15x FCF could push the stock close to doubling.

Beyond CRM: Burry Building a Broader High-Quality Software Basket

Beyond Salesforce, Burry is reportedly expanding exposure to software companies with limited vulnerability to private credit market disruptions. PayPal has been cited as a new addition to his portfolio, and he is said to have increased his MSCI weighting as well. Existing holdings include Adobe, Autodesk, Veeva Systems, and Fiserv.

This positions his strategy as more than a single-stock bet — it reads as a deliberate sector-wide contrarian call against what he views as excessive fear gripping the broader software space.

"Not a System Breakdown — Just a Supply Distortion": A Contrarian Bet Worth Watching

The market is interpreting Burry's moves as a contrarian play on a sector weighed down by AI overvaluation concerns and the drag of elevated interest rates. The underlying logic: if the sector-wide decline is rooted in a temporary supply-demand dislocation rather than a systemic breakdown, then large-cap technology companies with strong cash generation should ultimately regain market confidence.