Famed investor Michael Burry is positioning himself in companies that have fallen out of favour amid the current artificial intelligence market frenzy. According to reports from Substack, Burry revealed fresh bets on PayPal, Adobe, MercadoLibre, Lululemon and Zoetis in a May 19 post, companies he believes are being unfairly punished as investor capital floods into AI-driven trades. As reported by CNBC, Burry described MercadoLibre as a clean long-term winner after adding to the stock in the mid-$1,500 range, while also disclosing purchases of Adobe in the low $250s and terming PayPal a complete position, signalling strong conviction in the payments company.
While global markets continue to chase artificial intelligence-linked stocks, Burry is quietly building positions in companies that have been overlooked during the AI boom. As reported by Substack, Burry wrote that these stocks are part of the mass whale fall happening away from the main spectacle, using a phrase that has drawn attention across financial markets. According to CNBC, Burry believes investors are abandoning fundamentally strong businesses simply because they are not directly tied to artificial intelligence, creating opportunities for investors willing to look beyond the AI-driven headlines.
The market impact of Burry's strategy is evident in the performance of his chosen stocks. PayPal shares are down 23.9% year-to-date according to IBTimes UK, amid concerns over rising competition from Apple Pay, Block and Stripe. Adobe has fallen 26.9%, while Lululemon has slumped 42.1% this year as investors rotated away from companies lacking a strong AI narrative. Burry's latest comments also carried a broader market warning, drawing parallels with the dot-com bubble of the late 1990s and arguing that the current concentration of capital into AI-related stocks is creating distortions elsewhere in the market.
The whale fall reference comes from marine biology, where the carcass of a whale sinks to the ocean floor and sustains smaller ecosystems long after larger predators move on. According to Substack, this analogy reflects Burry's belief that these companies are being unfairly punished by the current market dynamics, creating potential opportunities for investors willing to look beyond the AI-driven headlines. Burry's strategy, therefore, is centred on buying durable companies that have become deeply discounted during the AI boom, with Scion Asset Management currently holding only nine positions according to Q1 2026 13F filings, reflecting his long-standing preference for concentrated, high-conviction bets.
