Famed investor Michael Burry is wading back into beaten-down software stocks, betting the recent sell-off was driven more by technical factors than deteriorating business fundamentals. The “Big Short” investor said in a Wednesday Substack post that a “reflexive positive feedback loop” between falling equity prices and stress in bank debt tied to software companies helped accelerate their declines, creating what he sees now as a buying opportunity. “I do not believe the technical pressures brought on by the private credit/software debt issues are big enough to affect these stocks for much longer,” he wrote. The move back into the stocks comes as fears mount that artificial intelligence could upend large portions of the software industry, challenging business models and long-held growth assumptions. The iShares Expanded Tech-Software Sector ETF , for example, has slumped about 28% from its September peak, pushing the group into a bear market and highlighting how quickly sentiment has soured on what had been one of Wall Street’s favorite sectors. IGV 1Y mountain iShares Expanded Tech-Software Sector ETF one year Burry disclosed he opened a roughly 3.5% position in PayPal, while maintaining holdings in Fiserv , Adobe , Autodesk and Veeva Systems . He said he planned to add positions in Salesforce and MSCI early Thursday. None of these companies rely on private credit markets, Burry said. Retail investors have been pulling money from a group of private credit funds for the past couple months, and many of the loans were tied to software companies. “I do see several handfuls of companies seriously affected by advanced [large language models] for specific reasons of the business models,” Burry said. “I do not see this for my selected companies and a good number of others, all of which I have just about finished analyzing forensically, competitively, and fundamentally as to investment potential.”