Burry Buys PayPal, Sees Credit Market as Culprit Behind Software Decline

Michael Burry, known for his predictions in 'The Big Short', has disclosed a new position in PayPal (PYPL) at $49. This represents a 3.5% stake in the payments firm and makes it one of Burry's top picks in the software-payments universe. According to Burry, PYPL ranks ahead of Fiserv and Adobe due to its stock-based compensation practices, future LLM and agent adoption, and discounted owners' earnings valuation.

Burry has also pushed back on the idea that the recent decline in software stocks was a 'TACO trade', which is a strategy tied to policy reversals by U.S. President Donald Trump. Instead, he attributes the weakness to credit market mechanics rather than macro-policy signaling. Burry believes that private-credit pressures are unlikely to persist and expects software stocks to recover.

Additionally, Burry has mentioned that several names in the space now offer a cushion beyond his 15% annualized long-term return target. He continues to hold positions in Autodesk and Veeva Systems and plans to initiate positions in Salesforce and MSCI, noting that these holdings do not rely on private credit markets for financing exposure.