--- title: "Michael Burry's $700 Microsoft Bet: Should You Copy His LEAP Trade?" type: "News" locale: "en" url: "https://longbridge.com/en/news/291947464.md" description: "Michael Burry's Scion Asset Management disclosed a significant bet on Microsoft, purchasing December 2028 LEAP call options with a strike price in the low $700s. This move contrasts with his previous short positions in AI stocks like Nvidia and Palantir. Burry believes Microsoft is undervalued despite recent stock declines driven by high capital expenditure concerns, arguing that the market underestimates the company's long-term AI revenue potential and fundamental strength." datetime: "2026-07-07T13:59:19.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/291947464.md) - [en](https://longbridge.com/en/news/291947464.md) - [zh-HK](https://longbridge.com/zh-HK/news/291947464.md) --- # Michael Burry's $700 Microsoft Bet: Should You Copy His LEAP Trade? All year, Michael Burry has been shorting AI. He bought put options against Nvidia. He shorted Palantir. He posted on Substack in May comparing the current market to the last months of 1999. If you followed his moves in 2026, you were building a pretty clear picture of where he stood. On June 25, he blew that picture up. Burry’s firm Scion Asset Management disclosed it had bought December 2028 LEAP call options on Microsoft with a strike price in the low $700s. Microsoft was trading around $356 at the time. He is betting it will nearly double before the end of 2028. ## **What Michael Burry’s Microsoft LEAP options bet actually means** LEAPs are call options with expirations more than a year out. Burry’s December 2028 contracts give him the right to buy 100 Microsoft shares per contract at around $700 any time before they expire, according to 24/7 Wall St. He does not have to exercise them. He just has to be right about the direction before the clock runs out. Getting to $700 is not enough on its own. The options only become profitable once Microsoft clears the strike price plus whatever premium Burry paid for the contracts. Fall short of that by December 2028 and the entire premium is gone. Burry explained his thinking in the Substack post. He wrote that “$350 level for Microsoft is a good place to buy” and described the longer-dated options as cheap relative to his outlook. LEAPs let him express that conviction without committing the capital a straight stock purchase would require. How much capital he actually committed is unknown. Scion Asset Management chose to deregister from the SEC on November 10, 2025, wound down its outside investor capital, and moved to a family office structure. The June 25 Substack post had no contract counts or dollar figures. Nobody outside Scion knows whether this is a small speculative position or a major allocation. ## **Why Microsoft stock fell 32% even as its AI revenue hit $37 billion** Microsoft stock dropped roughly 32% from its July 2025 peak of $550.83 going into Burry’s disclosure. Azure cloud revenue grew 40% in its most recent quarter. Annualized AI revenue crossed $37 billion, up 123% year over year. More than 80% of Fortune 500 companies run workloads on Azure. None of that stopped the stock from falling. The culprit was the spending plan. Microsoft committed to $190 billion in capital expenditures for 2026, nearly all of it going into AI infrastructure. Shares fell over 3% in after-hours trading on that news even though earnings came in above expectations. Investors are not disputing the revenue. They are worried about how many years of heavy spending come before the returns show up. Burry pushed back on that read in his Substack. He called 2026’s software selloff a product of “reflexive market dynamics,” a feedback loop between declining stock prices and stress in the bank debt market, not a sign of businesses deteriorating. He used the same logic to justify his long positions in Adobe and PayPal, both of which also sold off hard this year. ## **The Microsoft AI business Burry is betting will reach $700 by 2028** Azure hosts OpenAI’s models and serves as the cloud backbone for a growing share of enterprise AI workloads. GitHub Copilot runs inside the daily workflows of millions of developers. Microsoft 365 Copilot, which costs $30 per user per month on top of existing enterprise licenses, has crossed 20 million commercial seats. The contracted revenue sitting behind all of that came in at $627 billion in the most recent quarter, up 99% year over year including OpenAI. About 25% of that gets recognized over the next 12 months, up 39% from a year ago. Getting from $360 to $700 means adding roughly $1.3 trillion in market cap. Forty Wall Street analysts currently rate Microsoft a Buy or Strong Buy, with a consensus price target of $561.11, according to 24/7 Wall St. That target is $139 below Burry’s strike price. He is not betting on what the Street expects. He is betting the Street is still underestimating it. As TheStreet reported, Burry’s 2026 longs share a common thread. Microsoft, Adobe, and PayPal are all beaten down names he considers fundamentally intact. His shorts, Nvidia and Palantir, are the names he thinks are still priced for outcomes that have not arrived. The Microsoft bet is not a sudden change of heart on AI. It is the same framework applied in a different direction. ## **What retail investors should know before copying Michael Burry’s LEAP trade** People copy Burry. They did it with the housing short. They did it with GameStop. Some made money. Many got the timing wrong and did not. LEAPs add another layer of risk that stock trades do not carry. If Microsoft closes at $650 in December 2028, a shareholder is up roughly 80%. Burry’s options expire worthless. A strong, multi-year rally that stops short of $700 plus premium still wipes out the position. There is no partial credit. Buying Microsoft shares directly gets you exposure to the same thesis Burry laid out, with no expiration date working against you. At around $360, the stock trades at roughly 28 times forward earnings, below where it was before the 2026 selloff. If the business keeps compounding the way the last few quarters suggest, shareholders capture that without needing a near-doubling by a specific date. Burry said as much himself. He described $350 as a good entry for common stock buyers and framed the LEAPs as the vehicle that made sense for his own outlook and structure. That is a meaningful distinction. Retail investors who buy the options because Burry did, without matching his conviction or his ability to absorb a total loss on the premium, are taking on a very different bet than the one he made. **_Benzinga Disclaimer: This article is from an unpaid external contributor. 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