In this article, we will list the 5 Stocks Big Short’s Michael Burry Is Betting On. Please visit the 9 Stocks Big Short’s Michael Burry Is Betting On if you’d like to see an extended list and the methodology behind it.
5. Lululemon Athletica Inc. (NASDAQ:LULU)
Number of Hedge Fund Holders: 78
Lululemon Athletica Inc (NASDAQ:LULU) stock continues its downtrend with no analyst optimism in sight, yet Michael Burry seems to have taken a liking to how undervalued the stock has become. Recent analyst commentary suggests little upside, with no upside target price revisions from any analyst. The two most recent analyst ratings from Bernstein and Piper Sandler, on April 27 and April 23, respectively, reiterate a Hold rating.
Earlier, on April 20, Lululemon announced it had introduced an e-commerce channel in Mexico. This channel is enhancing its guest experience and also playing a key role in increasing LULU’s store locations in Mexico during fiscal year 2026. With the launch of Lululemon.mx, customers can now easily purchase LULU’s technical performance apparel, footwear, and accessories online. Making it easy for customers to shop anywhere. The company offers a variety of premium products for yoga, pilates, running, training, tennis, golf, and everyday movement for men and women.
With a focus on improving sales, the company plans to open approximately 15 stores across North America, including 8 in Mexico. LULU expects to open more than 30 stores in Mexico by the year-end.
Lululemon Athletica Inc. (NASDAQ:LULU) engages in the business of designing, distributing, and retailing technical athletic apparel, footwear, and accessories. The company offers a wide range of products, including tops, pants, jackets, shorts, and fitness-inspired accessories.
4. Fiserv Inc. (NASDAQ:FISV)
Number of Hedge Fund Holders: 83
On May 7, RBC Capital lowered the price target to $75 from $85 on Fiserv Inc (NASDAQ:FISV) while keeping an Outperform rating on the stock. The analyst told investors in a research note that the company’s Q1 reflects mixed financial performance. Things are expected to get better in the second half of 2026 and early 2027. As a result, investors are eagerly awaiting the Investor Day on May 14 for more information regarding the company’s future plans.
The company announced its Q1 2026 earnings report on May 5. It reported revenue of $4.68 billion, missing the Wall Street consensus of $4.73 billion. The earnings per share came in at $1.79, which comfortably beat estimates of $1.57. Going forward, Paul Todd, CFO of Fiserv, confirms revenue to grow by 1% to 3% in 2026 with strong growth in merchant services and flat to slightly down results from financial solutions, assuming the economy remains stable. Moreover, the company expects an EPS of $8 to $8.30.
Fiserv Inc. (NASDAQ:FISV) offers fintech solutions, such as account processing, digital commerce, fraud prevention, and payments, to segments such as financial institutions and merchants. The company is headquartered in Milwaukee, Wisconsin.
3. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 91
On April 27, Mizuho analyst Gregg Moskowitz set a target price of $270 for Adobe Inc. (NASDAQ:ADBE) and downgraded it to Neutral from Outperform. This reflects an upside of 7.9% from here on. This is a significantly bearish stance compared to JPMorgan’s $420 and Stifel Nicholas’ $400, both assigned on April 22. Analysts seem divided, and we find Michael Burry backing the bulls on this one.
As is evident from the difference in the above ratings, Gregg Moskowitz has some concerns. He is worried that Adobe consumers face competition from affordable and low-cost AI tools. Moreover, with cheaper options available for editing, users might stop using Adobe’s Creative Cloud. Moskowitz remarked,
Our conviction has weakened as we see intensifying competition in the prosumer/SMB segments threatening ADBE’s long-term terminal value, along with no clear catalyst for the stock, and a risk of margin erosion.
Additionally, Moskowitz believes that the company’s stock price won’t see any significant gain over the next 6 to 12 months, as the expected revenue growth is only 9.5% year over year. Due to high costs and the above-mentioned threats, revenue from the company’s generative AI product, Adobe Firefly, is also expected to fall. The analyst quoted:
We see a generally balanced risk/reward profile on ADBE from here, and are thus downgrading to Neutral from Outperform and lowering our PT to $270 from $315.
Adobe Inc. (NASDAQ:ADBE) is a technology company operating globally. The company operates in the Digital Media, Digital Experience, and Publishing & Advertising segments. It is based in San Jose, California, and was incorporated in 1982.
2. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 115
Since the US government has made it impossible for Chinese companies to buy top-tier Nvidia chips, Alibaba has tackled this issue by using local alternatives, positioning itself as a leader in China’s rush to build and own AI technology. On May 2, Alibaba switched to Huawei chips and has already launched the DeepSeek model, resulting in lower AI costs and offering higher discounts to gain market share. However, Huawei’s plan to produce 750,000 AI chips in 2026 is insufficient to meet the high demand from major technology firms such as Alibaba, Tencent, and ByteDance.
Alibaba’s share count rose to 19.19 billion from 19.13 billion in April as the company issued new shares to its employees, reducing the value of existing shares. Despite this, BNP Paribas’s price target of $209 still implies 49% upside from here.
Additionally, Alibaba-backed Moonshot AI secured a $2 billion in funding to compete with Silicon Valley tech giants. Earlier in April 2026, Moonshot achieved a major success, bringing in over $200 million in annual subscription revenue, primarily from individuals and businesses paying to use its Kimi chatbot and AI model services.
Alibaba Group Holding Limited (NYSE:BABA) operates as a technology infrastructure and marketing solutions provider. It operates both within the People’s Republic of China and internationally. The company was founded by Chung Tsai and Yun Ma in June 1999 and is headquartered in Causeway Bay, Hong Kong.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 312
Microsoft’s lackluster performance so far this year has attracted Michael Burry’s attention. He sees further upside in the stock despite the negative sentiment surrounding software companies. Wall Street analysts have a similar view. For instance, on April 24, Karl Keirstead of UBS, while maintaining a buy rating, set a target price of $510 for Microsoft Corp (NASDAQ:MSFT), implying nearly 25% upside from here.
The analyst update came a day after Microsoft Corporation (NASDAQ:MSFT) announced its biggest-ever investment in Australia, pledging $18 billion by 2029 to expand the country’s AI and cloud computing systems. The company expects growth in the usage of commercial cloud and AI/GPU in Australian cloud regions. It is also planning to expand the entity’s influence in the region by more than 140% by the end of 2029.
Prime Minister Anthony Albanese, alongside Microsoft Corporation (NASDAQ:MSFT) CEO Satya Nadella, revealed the plan, which also includes the expansion of cyber defense and large-scale AI workforce training programs. Satya Nadella remarked,
Australia has an enormous opportunity to translate AI into real economic growth and societal benefit.
Microsoft Corporation (NASDAQ:MSFT) is a global technology company that develops and sells a wide range of software, cloud services, devices, and business solutions, serving both individual users and enterprise customers worldwide. Its flagship products include Windows, Microsoft 365, Azure, LinkedIn, and Xbox.
While we acknowledge the potential of MSFT to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MSFT and that has 100x upside potential, check out our report about the cheapest AI stock.
READ NEXT: 8 Best American Stocks to Buy and Hold in 2026 and 12 Best Mid Cap AI Stocks to Buy According to Hedge Funds.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
