Microsoft Stock Rebounds as Burry’s Long-Term Wager Outweighs Italian Probe and Lawsuit

Friday delivered a dramatic reversal for Microsoft shareholders, with the stock surging 5.71 percent to close at €327.90 despite a fresh antitrust investigation in Italy and a shareholder class-action suit filed earlier in the week. The catalyst: Michael Burry, founder of Scion Asset Management and the investor famous for betting against US housing in 2008, revealed a sizeable long position in the software giant via LEAP call options.

In a June 25 post on his Substack channel, Burry said he had established a bullish options position targeting December 2028 expiry with strike prices in the low $700 range. He described an entry point around $350 as attractive, choosing derivatives over direct equity as a signal of multi-year conviction centred on Microsoft’s artificial intelligence infrastructure buildout. The timing was notable — just a day earlier, Microsoft shares had touched a 52-week low of €307.10, and the relative strength index stood at 43, technically oversold but not yet a clear buy signal.

That low came amid mounting legal and regulatory pressure. On June 21, a class-action complaint was filed in Washington accusing Microsoft of making misleading statements about the adoption of its Copilot AI products and the growth trajectory of its Azure cloud platform. The suit points to a roughly 10 percent share drop in January 2026 — a future date mentioned in the document — following weak quarterly results. Separately, Italy’s antitrust authority AGCM launched an investigation on Friday into Microsoft 365, alleging that the company automatically switched users into pricier tiers by integrating tools such as Copilot and Designer without adequate consent, making it difficult to opt out. Microsoft has pledged full cooperation, but the issue echoes a similar complaint filed by Australian consumer regulators last year over hidden costs in contract renewals.

Should investors sell immediately? Or is it worth buying Microsoft?

Despite the headwinds, the stock’s sharp Friday rally came on unusually high volume. Analysts noted a broader rotation out of AI-chip names and into AI-software plays, reinforcing a shift in sentiment toward the software layer of the artificial intelligence ecosystem. Yet the technical picture remains fragile. Year to date, Microsoft shares have shed nearly 19 percent, and the stock still trades well below its long-term moving averages. To break the overarching downtrend, the price would need to reclaim the 200-day line near €384 — a level that seems distant with the October 2024 high of €478.10 still 31 percent above current levels.

Microsoft is not standing still. CEO Satya Nadella, in an interview published Friday, argued forcefully against dependence on a handful of large AI models, urging companies to build proprietary models on their own data. “As many models as there are companies in the world,” he said. The company also extended Windows 10 support to October 2027, offering an extra year of security patches for users unable to upgrade to Windows 11. On the hardware side, prices for the Xbox Series X and S will rise by up to $150 from August 1, driven by higher memory-chip costs that industry reports say could persist through 2028. On a more positive note, Microsoft’s enterprise unit was ranked a leader in Forrester’s latest endpoint management report, which highlighted Intune’s integration of identity, security, and AI governance across platforms.

Burry’s conviction, expressed through LEAP options, bets on a multi-year horizon that aligns with the maturation of Microsoft’s AI business. Whether that bet pays off will likely hinge on the next quarterly results — and whether Azure can finally deliver the growth expectations that have so far fallen short.