“The Big Short” argued that Adobe’s forward outlook remains stronger than the market assumes, despite fears that AI could disrupt its core creative software business.
- Adobe’s Firefly AI products, rising enterprise adoption, and deep integration across large organizations and creative workflows are deep moats, Burry said.
- Burry said he views Intuit, Autodesk, and Unity Software as strong businesses but said he avoided them due to high valuations.
- The investor was bearish on Zscaler, Palo Alto Networks, and CrowdStrike.
Michael Burry published the second installment of his six-part series analyzing software companies on Thursday, this time focusing on the productivity tools and cybersecurity space.
In a lengthy blog post that discussed Adobe, Intuit, Autodesk, Unity Software, Zscaler, Palo Alto Networks, and CrowdStrike, Burry noted that Adobe looks the most promising in the group.
Adobe’s forward outlook remains stronger than the market assumes, despite fears that AI could disrupt its core creative software business, Burry argued.
The bullish view is driven by strong early traction for Firefly AI products, rising enterprise adoption, and Adobe’s deep integration across large organizations and creative workflows. The piece also highlights Adobe’s advantage in managing proprietary customer IP and its massive ecosystem reach, with 850 million monthly active users and relationships with 99 of the Fortune 100.
“Those 850 million monthly active users plus Adobe’s wide distribution across and within Anthropic, OpenAI, Google, and Microsoft amount to an aggressive moat,” Burry wrote. “If and when AI agents try to compete, Adobe still puts forth platform-agnostic connections across all four foundation-model ecosystems and has effective control of the playing field.”
While competition from AI-native tools, Canva and Figma remains a real threat, the argument is that human creativity and Adobe’s entrenched ecosystem position the company to adapt and potentially benefit from the AI transition rather than be displaced by it.
Moving to other names, Burry indicated he views Intuit, Autodesk, and Unity Software as operationally strong businesses with defensible positions against AI, yet avoids them because their valuations remain bloated, among other factors.
Burry expressed skepticism toward the cybersecurity trio, Zscaler, Palo Alto Networks, and CrowdStrike, citing their vulnerability to frontier AI models like Anthropic’s Mythos, among other factors.
“Cybersecurity companies are a different animal – the threat of advanced frontier autonomous AI models such as Mythos from Anthropic would seem to increase the business case for cybersecurity. And it is,” Burry wrote.
Here’s how Burry rated the companies discussed based on his proprietary metrics:
| Company | Classification | SW50 Rank | P/IV15 | Composite Score | Recommendation / Stance |
| Adobe (ADBE) | Chapel | 2 / 50 | 0.91x | 64.7 | Owns a full position (Falls in the “Fat Pitch” zone). |
| Intuit (INTU) | Castle | 24 / 50 | 2.70x | 38.2 | Does not own (Watching for a drop to ~1.5x IV15). |
| Autodesk (ADSK) | Chapel | 22 / 50 | 3.58x | 38.8 | Does not own (Admirer, but valuation is too rich). |
| Unity Software (U) | Castle | 35 / 50 | 2.13x | 14.9 | Does not own (Awaiting a drop to 1x P/IV15). |
| Zscaler (ZS) | Chapel | 38 / 50 | 5.85x | 13.7 | Does not own (Decent company, but “indecent” SBC). |
| Palo Alto Networks (PANW) | Castle | 40 / 50 | 7.86x | 12 | Does not own (Premium valuation and brutal dilution). |
| CrowdStrike (CRWD) | Castle | 50 / 50 | 23.18x | 2.4 | Does not own (Has considered shorting it; ranked last). |
Legends:
Classification: An AI-resilience tier mapping competitive moats against automation risk, ranging from impenetrable (Castle), to edge-threatened (Chapel), to highly vulnerable (Stone).
SW50 Rank: The stock’s relative risk-reward position within a 50-company software universe, scaled from best (1/50) to worst (50/50).
P/IV15: A valuation multiple tracking stock price against conservative owners’ earnings discounted at 15%; values under 1.0x signal underpriced assets, while high multiples indicate severe overvaluation.
Composite Score: A 0–100 fundamental health metric combining AI defense and valuation while heavily penalizing structural stock-based compensation dilution.
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