NEWS / Stock

The Guy Who Bet Against the Housing Market Is Now Betting on Adobe

Published Mar 3, 2026

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Summary:

Michael Burry disclosed a long position in Adobe, sending shares up 3% Tuesday.
Adobe is down 42% from its highs as markets fear AI will destroy its business.
The stock now trades at its cheapest valuation in five years — and the underlying business is still growing.

The man famous for betting against Wall Street when everyone else was celebrating just made a contrarian call — and this time, he's going long.

Who Burry Is and Why People Pay Attention

Michael Burry is the investor who predicted the 2008 housing collapse and made a fortune shorting mortgage-backed securities — a story told in The Big Short. He now manages his own money through Scion Asset Management, and his disclosed positions are closely watched.

His latest move stands out because it's a sharp reversal. By late 2025, put options against Nvidia and Palantir — two of the biggest AI darlings — made up nearly 80% of his disclosed portfolio, worth roughly $1.1 billion combined. Now he's going long on Adobe, a company that has been sold off largely because of AI fears.

Why Adobe Has Been Crushed

Adobe makes Photoshop, Illustrator, Acrobat, and a suite of creative tools used by designers and marketers everywhere. The stock is down 42% from its peak because investors are scared that AI image and video generators will make those tools obsolete.

But the financials don't show a company in freefall. Adobe posted record revenue of $23.77 billion in fiscal 2025, up 11% year-over-year. It generates more than $7 billion in annual free cash flow. Its own AI product, Firefly, now has 35% of Photoshop subscribers actively using generative AI features.

The stock trades at roughly 13x earnings — compared to a five-year average closer to 40x. Morningstar has a $560 fair value estimate on the stock. It closed Tuesday around $268.

Burry's thesis, in a word: the market is pricing in a collapse that isn't happening.

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