Michael Burry Eyes Salesforce as Software Rout Creates Buying Opportunity

Michael Burry, the real-world investor behind The Big Short, has flagged the recent software sector selloff as a buying opportunity — pointing to Salesforce (CRM) as a prime candidate. His diagnosis: the decline reflects market misread and technical supply/demand dynamics, not fundamental deterioration in the underlying businesses.

A Feedback Loop: Falling Prices Trigger More Selling

Via his Substack, Burry described the current software correction as a 'reflexive positive feedback loop': falling share prices amplify debt stress in private credit tied to the software sector, which triggers further selling, which deepens the drawdown. The spiral feeds itself.

He does not, however, believe this technical pressure will persist long enough to impair intrinsic business value. In his view, the market is over-extrapolating 'debt risk' to discount quality software franchises that don't actually face that exposure — creating a mispricing opportunity.

Why Salesforce — Revenue and Free Cash Flow Both Holding

Burry's primary target is Salesforce. The company's FY2026 earnings report showed record revenue and free cash flow, with management signaling potential return to double-digit growth. Market projections put Salesforce revenue at roughly $60.6 billion by 2030 — an earnings-based growth story that remains intact despite the share price dislocation.

Market projections place Salesforce revenue near $60.6 billion by 2030 — an earnings-based growth narrative that remains fully intact despite the stock's technical selloff.

Wall Street Is Constructive — A Significant Valuation Gap

Most Wall Street analysts are constructive on Salesforce — multiple buy ratings, average price target around $262, implying meaningful upside from current prices.

On valuation, a re-rating case is emerging. At just 12x free cash flow, back-of-envelope math suggests 60%+ returns over three years. If the multiple re-rates to 15x FCF — still below historical norms — the stock could nearly double. Valuation reset potential is firmly in play.

Beyond Salesforce — Building a Quality Software Basket

Burry is expanding beyond Salesforce into software names he views as relatively insulated from the private credit market shock. Reports indicate new additions of PayPal and increased MSCI weighting. Existing holdings include Adobe, Autodesk, Veeva Systems, and Fiserv.

This is not a single-stock bet. It reads as a systematic re-entry into quality software, fading a sector-wide panic that Burry believes has overshot the underlying fundamentals.

Supply Dislocation, Not System Breakdown — A Contrarian Bet Worth Watching

Markets are reading this as a contrarian play against AI overvaluation fears and high-rate headwinds weighing on software multiples. If the sector's decline is a technical dislocation rather than systemic deterioration, premium-cash-flow large-cap software is likely to reclaim market confidence once the private credit pressure abates. That is Burry's thesis — and he's backing it with real capital.