An investor from The Big Short is betting on a reversal after the "soft-apocalypse". What did he buy?

Michael Burry, known as the prototypical character in the movie "The Downgrade," said he decided to take advantage of the recent drop in stocks of software developers and payment companies. On April 15, he added a new stock to his portfolio and plans to invest in two more. Which companies did he choose and why is he not afraid of the software apocalypse"?

"Today I opened a new position for about 3.5% of my portfolio in PayPal common stock at $49.375," Burry wrote on his Cassandra Unchained blog on April 15.

Burry also wrote that he plans to open positions in cloud software developer Salesforce and financial analytics provider MSCI. He continues to hold shares of fintech service Fiserv and software developers Adobe, Autodesk and Veeva - those stocks account for about 20% of his portfolio, 4-6% each. Burry wrote that he hasn't sold shares or closed options positions for new trades.

"Yes, it's a bet on a rebound in software and payments stocks after being crushed by unrealistic hype around AI," Burry writes.

He said he decided to analyze payment companies along with software developers after their recent decline. As a result, Burry came to the "preliminary" conclusion that in his personal ranking of software and payment companies, PayPal sits "near the top," just above Fiserv and Adobe. His ranking takes into account parameters such as companies' equity compensation, competitive position given the proliferation of artificial intelligence, and a discounted estimate of total shareholder return.

He believes his favorites are not among the companies that are truly at serious risk from the emergence of advanced AI models. None of these companies are also dependent on the private credit market, which has faced investor withdrawals, Burry noted. He predicted that at current prices, the stock would fetch him "above the required long-term annualized return of 15%."

Software developer stocks have been in disgrace this year. In January and February, investors sold them en masse amid growing fears about the disruptive effects that artificial intelligence - particularly advanced Anthropic models - could bring. This phenomenon has been dubbed the "software apocalypse" on Wall Street. Last week, a new wave of sell-offs swept the sector. Investors were alarmed by Mythos, Anthropic's upcoming model, which the company claims is so powerful that it can overcome existing cyber defenses if abused.

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