Adobe, Zoetis and PayPal: an investor from The Big Short bought stocks outside the AI bubble

Investor Michael Burry, who predicted the 2008 housing market crash and became the prototype for the character in "The Downgrade Game," has bought assets whose price has fallen due to a rotation of capital into the artificial intelligence field. He announced this in his latest post on Substack.

- Shares of MercadoLibre, the largest Latin American e-commerce platform and fintech ecosystem developing a marketplace, Mercado Pago payments and related services. Bury points out that from 2022 to 2025, the stock has rallied while the price-to-sales multiple - the ratio of capitalization to revenue - has stayed roughly flat. That makes Mercado Libre stock fairly cheap and a "net long-term winner," he writes. Another plus, the investor cites the fact that this company isn't from the U.S. and doesn't operate in the United States. The average purchase price was about $1500 per share. MercadoLibre's capitalization is down more than 20% since the beginning of the year.

- Shares of Zoetis, the world's largest animal health company. The average purchase price was just above $77 per paper. Bury calls this idea a fat pitch - in investment jargon, it's a very attractive opportunity, "a ball that's easy to hit." But he stipulates at once: patience will be required on this position, because the stock, according to him, is still "selling hot" - that is, the pressure on the quotation is probably not yet exhausted. Since the beginning of the year, Zoetis shares have fallen in price by 37%.

- Shares of Adobe, a maker of software for the creative industry and a victim of the "software apocalypse." Bury writes that he bought the securities at around $250. This is in addition to a major purchase he made in the neighborhood of $230. The company has lost 27% of its capitalization since the beginning of the year.

- Shares of Lululemon, a maker of athletic apparel and yoga accessories that makes the popular Align leggings. Bury bought Lululemon at about $120. The company's stock has fallen 42% since the beginning of January.

- Shares of payment system PayPal, which have lost a quarter of their value since the beginning of the year. Burry opened a position in PayPal about a month ago.

In his post, Burry noted that the current market situation is very reminiscent of the period leading up to the dot-com crash. According to him, outside the main market "showcase" - AI-related companies - there is a sell-off of quality stocks, similar to the capital rotation of the late 1990s, when investors were selling shares of "old economy" companies and buying securities of U.S. Internet companies.

"It's just an asset bubble, no more and no less," he wrote.

On May 11, Burry declared a stock market crash imminent. He warned that technology companies are extremely overvalued and investors should lock in profits and go into cash.

This article was AI-translated and verified by a human editor