Michael Burry buys beaten-down, forgotten fintech stock
While the rest of the market has been chasing AI, Michael Burry spent his Monday evening on Substack explaining why he has been buying the stocks everyone else is ignoring.
He has a name for what he is seeing. And it is not a phrase Wall Street has used before.
What Burry said and the stocks he is buying
Burry disclosed in a Substack post on May 19 that he had added to positions in PayPal, Adobe, MercadoLibre, Lululemon, and Zoetis, a cluster of stocks sharing one defining characteristic: they have all been punished heavily in a market laser-focused on artificial intelligence.
"These stocks are part of the mass whale fall happening away from the main spectacle," Burry wrote in the post.
The "whale fall" metaphor is a deliberate provocation. In marine biology, a whale fall is the carcass of a whale that sinks to the ocean floor and sustains an entire ecosystem of creatures that feed on what larger predators have overlooked. Burry is saying the stocks being abandoned in the rush toward AI are feeding opportunities for investors willing to look where the crowd is not.
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Burry added to MercadoLibre in the mid-$1,500 range, describing it as a "clean long-term winner" trading at a discount because of its international exposure. He bought Adobe in the low $250s. He described PayPal as a complete position. Lululemon came in at approximately $120, according to CNBC.
Why PayPal stands out among Burry's beaten-down bets
PayPal is down 23.9% year-to-date as of the week ending May 19, according to IBTimes UK. The company processes hundreds of billions of dollars in payment volume annually and has been implementing a margin improvement program that management argues will show up meaningfully in the numbers through 2026 and 2027. But investor enthusiasm for the stock has been absent for years as competition from Apple Pay, Block, and Stripe has intensified.
That competitive pressure and growth slowdown narrative is exactly the kind of story Burry treats as opportunity rather than warning. His framing of PayPal as a complete position suggests he views the current price as one where the long-term risk-reward is firmly in his favor rather than a tentative entry he plans to size up later.
The same logic applies across the other names. Adobe is down 26.9% year-to-date. Lululemon is down 42.1%. These are not obscure micro-caps. They are well-known companies with durable businesses that have been caught in a rotation away from anything that does not have an AI growth narrative attached to it, IBTimes UK confirmed.
Burry's dot-com warning and why he sees it in the AI trade
Burry's Substack post was not only about the stocks he is buying. It also contained a market warning that connects his current positioning to a historical pattern he has been tracking, according to CNBC.
Burry said the AI investment boom is creating distortions that echo those he observed during the dot-com era. The concentration of capital into AI-adjacent names, he argues, has left the rest of the market undervalued in ways that mirror how non-internet stocks were abandoned in 1999 as investors piled into anything with a dot-com suffix. His current purchases are a direct expression of that view. He is buying the dot-com-era equivalents of the "boring" companies that kept compounding while everyone chased the hot theme.
Scion Asset Management now holds nine positions in total following the Q1 filings, an extremely concentrated portfolio that reflects Burry's preference for deep conviction over diversification. Every position is a contrarian bet on a company that institutional investors have broadly abandoned in the current market cycle.
Key figures from Burry's May 19 Substack disclosure and Q1 2026 13F:
- PayPal: described as a complete position; down 23.9% year-to-date, according to IBTimes UK.
- Adobe: added in the low $250s; down 26.9% year-to-date, IBTimes UK confirmed.
- MercadoLibre: added in the mid-$1,500s; described as "clean long-term winner"; down 21.2% year-to-date, according to CNBC.
- Lululemon: built full-sized stake at approximately $120; down 42.1% year-to-date; no consensus price target upgrades from any analyst in the past month, according to Foreign Policy Journal.
- Zoetis: added to position; animal health company, CNBC confirmed.
- Scion total holdings: nine positions as of Q1 2026 13F, Foreign Policy Journal noted.
- Burry's exact quote: "These stocks are part of the mass whale fall happening away from the main spectacle," CNBC confirmed.
What Burry's whale fall thesis means for investors watching the AI trade
The most important thing about Burry's current positioning is not which stocks he bought. It is the framework he is using to identify them. He is not looking for AI winners. He is looking for structurally sound companies that have been abandoned because they are not AI stories.
That framework has a specific implication for how to read the market right now. If capital has been this heavily rotated into AI at the expense of companies like PayPal, Adobe, and Lululemon, the opportunity in those names exists precisely because of the AI trade, not despite it. The bigger the spectacle around AI, the larger the whale fall feeding opportunity Burry believes he is identifying.
Whether his thesis plays out depends on whether the AI concentration eventually reverses and sends capital back into the neglected names. If it does, Burry will have bought the rotation trade before it happened. If the AI trade continues to dominate, the whale fall stocks may sit flat or fall further while the spectacle continues. His nine-position portfolio suggests he has made his bet. The market will answer in time.
Related: Michael Burry has a blunt message on the stock market for 2026
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This story was originally published May 20, 2026 at 4:33 PM.