The investor who called the 2008 housing collapse is doing something that Wall Street is quite bearish on. He is buying software stocks.
Michael Burry, whose famous trade against the mortgage market was depicted in the film “The Big Short,” has been building positions in a group of well-known technology names that have fallen out of favor. His latest target is Salesforce, a Dow 30 stock.
Burry is making a clear and deliberate argument that the sell-off in quality software stocks offers a clear buying opportunity.
Burry thinks the software selloff is overdone
Burry does not believe the pressure on software stocks comes from companies performing poorly. He thinks it is a technical problem as falling prices triggered additional stress on software-related debt.
Burry wrote in a Substack note:
“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.”
In other words, if you strip away the fear and the forced selling, many of these businesses are still in solid shape.
Related: Michael Burry drops shocking verdict on software stocks
Beyond Salesforce (CRM), Burry opened a roughly 3.5% position in PayPal, maintained holdings in Fiserv, Adobe, Autodesk, and Veeva Systems, and said he plans to add MSCI as well.
This is a targeted group of companies that occupy important roles in payments, design software, enterprise workflows, and data analytics.
Moreover, these are established businesses trading at prices that, in Burry’s view, reflect fear more than reality.
What Salesforce stock delivered in fiscal 2026
Burry has raised exposure in a company that wrapped up one of its strongest financial years on record.
Salesforce chief operating and financial officer Robin Washington told investors at the Morgan Stanley Technology, Media and Telecom Conference on March 3 that the company posted record revenues, a record quarter, and record cash flows to close out fiscal year 2026.
- The CRM giant returned more than $14 billion to shareholders, which represents roughly 99% of its free cash flow.
- Washington also pointed to what she described as a 300% quarter-over-quarter adoption of Salesforce’s premium product bundles in the fourth quarter.
- That number reflects real demand from customers willing to pay up for expanded capabilities.
- Looking ahead, Salesforce told investors it expects to return to organic double-digit revenue growth, with acceleration coming in the second half of fiscal 2027.
Washington noted that the company ended fiscal 2026 with what it calls a “Rule of 44” score, a measure that combines revenue growth and operating margins, and is targeting a “Rule of 50” over time.
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Salesforce also completed its acquisition of Informatica in November, and described the integration as moving faster than expected, with the deal turning accretive in under 12 months.
The AI angle Wall Street is missing
Part of the reason Salesforce shares have come under pressure is the same fear that is affecting software stocks.
Investors worry that artificial intelligence will allow companies to build their own tools and reduce exposure to third-party SaaS platforms.
Salesforce president of enterprise and AI technology Joe Inzerillo pushed back on that at the Morgan Stanley conference.
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He compared the situation to skilled tradespeople getting access to better equipment. Better tools raise the quality of work for everyone without eliminating the need for proven, trusted platforms.
Inzerillo also argued that Salesforce’s 26 years of customer data give it a structural edge that is extremely difficult to replicate.
That data powers its artificial intelligence layer, called Agentforce, and creates what he described as a continuous improvement loop.
Washington added that Salesforce is tracking what it calls “agentic work units” to measure the real business value these AI tools deliver for customers.
The goal is to show that Salesforce is not just a wrapper around language model tokens. It is delivering measurable outcomes for the businesses that rely on it.
Burry is betting that the market has been so focused on which companies will win the artificial intelligence race that it has overlooked which established companies are quietly building real AI businesses right now.
Based on what Salesforce just reported, the argument carries some weight.
What is the Salesforce stock price target?
Analysts tracking CRM stockforecast revenue to increase from $41.53 billion in fiscal 2026 to $60.64 billion in fiscal 2030.
In this period, the SaaS giant is projected to grow free cash flow from $14.40 billion to $20.80 billion.
If Salesforce stock is priced at 12 times forward FCF, which is below the 10-year average of 30x, it could return 63% within the next three years. If the FCF multiple expands to 15x, CRM stock could double in three years.
Out of the 37 analysts covering Salesforce stock, 28 recommend “Buy”, eight recommend “Hold”, and one recommends “Sell”. The average CRM stock price target is $262, indicating 40% upside from current levels.
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