Michael Burry just went long on software stocks. Yes, that Michael Burry.

The man who made his name (and a movie) betting against the entire housing market now thinks the sell-off in software has gone too far. He opened a 3.5% position in PayPal at $49, and said he's adding Salesforce and MSCI this morning.

Meanwhile, the Nasdaq just posted its 12th straight day of gains (the longest streak since July 2009), and the S&P cracked 7,000 for the first time in history.

So we're walking through Burry's thesis, what it means for the AI trade, and whether the most famous bear in finance is actually turning bullish today.

This is not financial advice. Always do your own research. Past performance doesn’t guarantee future results.

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Michael Burry thinks you're wrong about software stocks.

Not you specifically. The market. Over the past six months, the iShares Software ETF (IGV) dropped 28% from its September peak as investors panicked over the idea that AI would eat the entire software industry alive. It was an indiscriminate sell-off, and Burry says it was driven by mechanics, not fundamentals.

His argument (which he laid out on Substack yesterday): a "reflexive positive feedback loop" between falling stock prices and stress in private credit markets tied to software companies accelerated the decline way beyond what the actual business performance justified.

In plain English: funds that lent money to software companies started getting nervous, which put pressure on the stocks, which made the lenders more nervous, which put more pressure on the stocks. A doom loop that fed on itself.

"I do not believe the technical pressures brought on by the private credit/software debt issues are big enough to affect these stocks for much longer," Burry wrote.

So he bought. PayPal at $49 (down 82% from its 2021 peak). He's holding Fiserv, Adobe, Autodesk, and Veeva. And he said he planned to add Salesforce and MSCI on Thursday morning.

Burry isn't saying AI is fake. He actually agrees that some software companies are in real trouble from large language models. He just doesn't think the ones he's buying are those companies. His exact words: "I do see several handfuls of companies seriously affected by advanced LLMs for specific reasons of the business models. I do not see this for my selected companies."

We think this is worth paying attention to, and not just because Burry's track record speaks for itself (though we disagree with his overarching thesis. We’re abundance theory guys, not AI doomers).

The broader point is that even the skeptics are starting to separate "AI is real and disruptive" from "AI is going to destroy every software company that exists." That distinction matters. The market spent the last few months treating them as the same thing, and it created a buying opportunity that even our favorite permanent bear couldn't pass up!

PayPal at $49 is still a company that needs to prove it can grow again… but when the guy who shorted the housing market starts buying the dip, it tells you something about where the fear cycle is.

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The Nasdaq just went on a 12-day winning streak. That's the longest since July 2009. The Nasdaq Composite hit a record 24,102 on Wednesday, and the S&P 500 cracked 7,000 for the first time. The rally has been fueled by two things converging at once: ceasefire optimism in the Iran conflict and a strong start to earnings season. Two weeks ago the market was pricing in escalation. Now it's pricing in peace. The speed of the reversal has been wild to see.

Netflix beat on earnings and revenue, but the stock fell 9%. The streamer posted $12.25 billion in Q1 revenue and $1.23 EPS (analysts expected $12.18 billion and $0.76). But the company missed on second quarter guidance and also announced that its co-founder Reed Hastings is stepping down, and the market didn’t like either of those things.

Hims & Hers jumped 11% after the FDA announced a peptide review. RFK Jr.'s FDA is reconsidering restrictions on 12 peptides, and HIMS is positioned to benefit. The company bought a peptide manufacturing facility in California last year, and Bank of America raised its price target from $21 to $25. If you've been watching the GLP-1 and longevity space, this is one to keep on the radar.

Israel and Lebanon agreed to a 10-day ceasefire. This is part of the broader de-escalation pattern that's driving the rally. Netanyahu said he agreed to it "to advance" peace efforts. The US-Iran ceasefire expires April 22, and both sides are reportedly in favor of extending it. Trump said the war is "very close to over."

Mortgage rates fell to their lowest point in a month as war worries eased. The average 30-year fixed-rate mortgage dropped seven basis points to 6.30% for the week, according to Freddie Mac. The dip helped support an increase in refinance applications after five consecutive weeks of declines, though purchase activity remained subdued as potential homebuyers stayed cautious amid economic uncertainty.

For the income-focused investors in the room, here's a snapshot of where yields are sitting right now across the major categories.

Covered-call ETFs (monthly income, higher risk)

Traditional dividend ETFs

Treasuries (as of April 10)

A quick note on the covered-call ETFs: yields above 10% look incredible on paper, but they come with trade-offs. JEPI and JEPQ cap your upside by selling call options against the index, which means in a rally like the one we're seeing right now, you're leaving gains on the table. And those distributions are mostly taxed as ordinary income (up to 37%), not at the lower qualified dividend rate. They're real income tools, but they're not free money. Just something to keep in mind.

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Brandon & Blake of Invested Inc