Michael Burry Increases Stakes in Alibaba, Adobe, PayPal, and Veeva
N.R. Finch
Michael Burry disclosed larger positions in Alibaba, Adobe, PayPal, and Veeva, arguing the market is wrongly punishing cash-rich, low-debt companies because AI capital flows have distorted valuations.
What is the logic behind Burry's bet?
Burry sees a systemic mispricing: capital is flooding into AI-themed stocks, dragging down mature companies with solid fundamentals that don't fit the AI narrative.
His screening criteria: high owner earnings, low debt, sustained buybacks. This means → he is not chasing growth expectations but looking for companies that are buying back their own shares with real cash.
In plain terms = the AI frenzy has cheapened a set of proven earners, and Burry thinks that gap is the opportunity.
What is the case for each of the four stocks?
Adobe: gross margins near all-time highs; fundamentals intact. The AI narrative has pressured the stock, but Burry calls it "deep value" — earning power unchanged, just overlooked.
Alibaba: Burry calls it "the most advanced company in China's AI strategy" and notes sustained buybacks. He argues value keeps accruing to shareholders, with the stock well below recent highs — "when the time comes, it will move fast and move big."
PayPal: valued at roughly 7–8× earnings and buying back stock aggressively. Burry writes: "The market has been holding a funeral for PayPal for years, but the body never shows up." He adds that frequent management turnover has also weighed on the price.
Veeva Systems: P/E and price-to-sales ratios far below historical levels. Burry directly addresses fears of Salesforce competition: "The threat covers only a small part of its business — the market's read is grossly exaggerated."
What is Burry really betting on?
One thesis: the distortion from AI capital flows is temporary, and the market's extrapolation of an "AI-maximalist scenario" will eventually correct.
This means → once sentiment shifts, capital flows back to these overlooked but cash-generative names, and the valuation gap narrows fast.
This reflects Burry's consistent contrarian style — not trying to pick AI winners, but collecting the targets that AI hype has mispriced.
Content is for reference only, not financial advice.