Michael Burry Just Bought Microsoft. It’s a Genius Move Worth Following

Michael Burry just bought Microsoft (NASDAQ: MSFT | MSFT Price Prediction), and he picked a fascinating moment. The software giant reports Q3 FY26 results on April 29, after the bell. This print could decide whether his contrarian call looks brilliant or early.

A Bombed-Out Mega-Cap Meets a Catalyst

Burry disclosed the new MSFT long via his Substack on April 23, framing it as part of a thesis on “bombed out software and payment stocks” mispriced by AI anxiety. The setup is striking. MSFT fell 23% in Q1 2026, its worst quarter since the Great Recession, sits roughly 22% below its July 2025 all-time high of $555.45, and trades at a forward P/E near 26x versus a five-year median around 34x.

Yet the operating story is humming. Last quarter, Microsoft delivered non-GAAP EPS of $4.14 on $81.27 billion in revenue, up 16.7% year over year, with Azure growing 39% and commercial RPO ballooning to $625 billion, up 110%. Shares have actually rallied 18.60% over the past month.

Burry’s not catching a falling knife. He’s catching a base.

Q3 FY26 Consensus Snapshot

Azure, Capex, and Copilot Will Decide This One

I’ll be watching three things:

1. First is Azure. Management guided 37%-38% constant-currency growth, and Amy Hood explicitly said “demand continues to exceed supply, significantly accelerating growth rates in both Q3 and Q4.” Anything below 37 puts the AI demand story on the defensive.
2. Second is CapEx. Microsoft spent $29.9 billion on PP&E last quarter, up 89% year over year, and the market wants reassurance the returns are real. Hood’s framing matters. She’s reminded investors that GPU contracts for the largest customers cover “the entire useful life of the GPU,” which de-risks the headline number.
3. Third is Copilot monetization. The bears keep harping on 3-5% Microsoft 365 base penetration, but the trajectory is wild. Nadella disclosed 15 million paid M365 Copilot seats, up over 160% year over year, with daily active users up 10x. GitHub Copilot now has 4.7 million paid subscribers, up 75%. I’m watching whether seat additions accelerate again. That’s the tell on whether the AI revenue flywheel is broadening beyond Azure.

One yellow flag remains. More Personal Computing fell 3% last quarter, and I want to see if Windows and Xbox stabilize. Polymarket traders, for what it’s worth, assign a 94.1% probability of a beat against the $4.05 GAAP consensus.

The Burry Trade Needs This Print

The contrarian thesis only works if Wednesday confirms the operating story is intact while the multiple is compressed. Nadella keeps saying “we are only at the beginning phases of AI diffusion,” and the $625 billion RPO backs him up. If Azure clears 38 and Copilot seats accelerate, Burry’s vindication arrives within 48 hours. That’s the kind of asymmetric setup I love watching unfold in real time.