Burry's Watchlist to Test If IBM's Crash Is Sectorwide
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- IBM stock plunged on Tuesday in its worst single day of trading ever after CEO Arvind Krishna attributed the miss to the company's failure to quickly adapt to the AI-driven market.
- Michael Burry wrote on his Substack on Wednesday that the crash might be an overreaction 'if management's explanation is corroborated by other companies throughout earnings season.'
- Burry named specific reports to watch for revenue-diversion evidence: Wipro (July 17), Infosys (July 23), ServiceNow and Microsoft (both around July 29), and Cognizant and Capgemini (late July/early August).
- Burry flagged Accenture as the best comparison for IBM but noted the consulting giant doesn't report until September.
- Burry maintained his bearish stance on Palantir in a separate section of the note, though he didn't list it among his watchlist names.
- Burry highlighted cybersecurity peers — Checkpoint (July 29), Fortinet (early August), Palo Alto Networks (mid August), CrowdStrike and Zscaler (late August) — saying they should report an extra revenue bump if IBM's cybersecurity-distraction explanation holds.
- Burry raised the possibility that customers are only temporarily shifting spending rather than abandoning IBM, and wrote that validation of IBM's reasons 'might suggest a mania in AI buildout parts is not a good reason to give up on IBM.'
Why it matters: IBM's plunge wiped out years of gains in a single session, and Burry's framework turns the next two weeks of tech earnings into a sector-defining diagnostic: if Wipro, Infosys, Cognizant, and Microsoft all flag the same late-quarter revenue diversion and cybersecurity distractions Burry cites for IBM, the selloff spreads; if they don't, the crash is a company-specific overreaction and IBM becomes a contrarian buy candidate.
