Wall Street closes at a record for the first time since end of January
Michael Burry, famous for his ‘Big Short’ housing crash bet in 2008, and his Scion Asset Management firm, is reportedly taking long positions in three enterprise software companies that have experienced significant declines in 2026: Adobe (ADBE), Autodesk (ADSK), and Veeva Systems (VEEV).
This move, attributed to a belief in “credit-driven selling exhaustion,” suggests that forced liquidations have ended, leaving high-quality SaaS companies trading at lower valuations than they reached in 2022. Year-to-date, Adobe is down about 30%, Veeva Systems by 29%, and Autodesk by 22%, notably underperforming the S&P 500.
This marks a shift for Burry, who previously held bearish positions on AI-related stocks, including large puts on Palantir and NVIDIA. If confirmed in the upcoming Q1 2026 13F filing, this move signals a rotation towards undervalued software franchises.
Institutional buy-the-dip strategies in quality software during downturns have attracted attention, as evidenced by JPMorgan’s buy signals during S&P 500 pullbacks.
Michael Burry Scion’s Reported Thesis: Software Value After the Credit Reset
The core argument behind the reported Scion positions is that the multi-year compression in SaaS valuations was driven more by credit-market mechanics than by deteriorating fundamentals.
Leveraged investors unwound high-multiple software exposure as interest rates rose and liquidity tightened through 2023 and 2024. This SaaS valuation reset began in late 2021, pushing many enterprise software stocks to price-to-sales and earnings multiples not seen since 2017 and 2018.
Michael Burry and his contrarian track record lend credibility to this thesis, as he has historically identified dislocations caused by structural selling.
The current situation does not require a reacceleration in enterprise spending but relies on clearing the forced-selling overhang to reveal intrinsic value. The three stocks in question are trading at discounted valuations and have identifiable intrinsic value.
The Q1 2026 13F filing will provide definitive data, as reported positions rely on order flow tracking and sentiment analysis.
A key risk is a deeper-than-expected contraction in enterprise IT budgets in late 2026, which could prolong drawdowns before recovery.
Adobe (ADBE): Firefly Upside Discounted as AI Disruption Fears Dominate
Adobe (ADBE) is trading near the lower end of its 52-week range of $338.42 to $587.89, down about 30% year-to-date as of April 2026. Its forward price-to-earnings (P/E) ratio is around 18x, similar to levels not seen since 2018–2019, while its trailing P/E is about 24x. The company’s market cap is approximately $98Bn.
In fiscal Q1 2026, Adobe reported revenue of $5.71Bn, with digital media annual recurring revenue (ARR) growing. However, concerns about competitors’ generative AI tools are weighing on investor sentiment and Adobe’s pricing power in its creative software.
Despite the launch of Firefly, Adobe’s generative AI platform, the anticipated revenue growth has yet to materialize. The recent announcement of the CEO’s departure after 18 years has also contributed to selling pressure.
Analysts, alongside Michael Burry, remain generally optimistic, with a consensus price target of around $490, suggesting over 30% upside. However, there has been an increase in “Hold” ratings in the past two quarters compared to previous years.
Autodesk (ADSK): Near-Monopoly AEC Franchise at a Cycle Discount
Autodesk (ADSK) has declined about 22% year to date, currently trading around $225, within a 52-week range of $209.14 to $310.05. This underperformance is roughly 20 percentage points compared to the S&P 500.
The company’s forward P/E ratio is around 22x, while the trailing P/E is about 33x, indicating its strong position in architecture, engineering, and construction (AEC) software, where it holds a near-monopoly.
However, it faces challenges from a cooling construction market and a transition to subscription-based revenue, both of which have complicated its financial reporting.
In fiscal year 2026, Autodesk reported revenue of $6.13Bn and free cash flow margins of approximately 37%. The billing cycle transition is largely complete, alleviating the pressure on previous stock valuations.
Analysts target the stock price at around $285, suggesting +27% upside potential, with most ratings at Buy or equivalent. The ongoing SaaS valuation compression affects Autodesk, whose current multiples remain at a multi-year discount to its free cash flow generation and market position.
Michael Burry Calls Veeva Systems (VEEV): Life Sciences SaaS With 115%+ Retention Trading at a Discount
Another one on the Michael Burry radar is Veeva Systems (VEEV), which has declined about 29% year to date, trading near $175, within a 52-week range of $155.60 to $262.29. This makes it the most discounted stock in the Scion basket.
The company has a forward P/E of around 24x and a trailing P/E of approximately 34x, operating as a vertical SaaS provider for the life sciences industry. Its net revenue retention has consistently exceeded 115%, backed by strong subscription services and operating margins nearing 35%.
The recent decline in VEEV is largely due to reduced biotech and pharmaceutical spending that began in late 2025, rather than any issues with its competitive position.
Analysts have set a price target near $240, indicating about 37% upside from current levels, mostly leaning towards Buy ratings. Veeva’s strong retention and market position align with the Scion thesis of a high-quality SaaS franchise facing credit-cycle pressures.
All three companies in the analysis face risks from upcoming earnings reports, which will be a key indicator of enterprise software spending trends.
Any significant macro downturn in H2 2026 could further impact stock drawdowns. Confirmation of positions is expected by mid-May with the 13F disclosure.
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