Forget Nvidia: Michael Burry and Bill Ackman Are Buying These Two Beaten Down Stocks — Should You?

Forget Nvidia: Michael Burry and Bill Ackman Are Buying These Two Beaten Down Stocks — Should You? Fahad Saleem Thu, August 13, 2026 at 6:48 PM GMT+2 4 min read SPGI ADBE Let's face it: Nvidia (NVDA) can't grow the way it already has. The money now is in finding the next beaten-down or ignored stocks.

So let's learn from two Wall Street giants who spend their days doing exactly that — Michael Burry and billionaire Bill Ackman. Ackman's Buy: S&P Global (Down 15% YTD) Ackman disclosed in his latest investor letter that he bought S&P Global (NYSE:SPGI). The stock is down more than 20% from its 2025 high, and Ackman thinks the market threw out a great business over a fear that barely touches it.

Here's the fear. S&P Global sells financial data, and investors worry AI will make that data cheap and commoditized. The selling picked up after Anthropic launched its Claude Cowork tool.

Ackman's answer: the fear is aimed at the wrong part of the company. S&P Global runs three benchmark franchises — Ratings, Indices, and the Platts energy pricing business. Ackman says these businesses produce high margins.

None of them is a data-lookup product AI can copy. Ratings is a near-duopoly with Moody's, and the two rate over 95% of US corporate debt. Companies pay for an S&P rating because it saves them roughly three times the fee in lower borrowing costs, and because lenders trust the name.

AI can't manufacture that trust or the regulatory moat around it. What makes the stock long term: Debt keeps getting issued, and a wall of pandemic-era borrowing has to be refinanced in 2027 and 2028. This helps the company's Ratings business.

The shift from active funds to passive index funds feeds Indices. Buybacks alone are set to shrink the share count around 4% a year, and Ackman expects earnings to compound in the low-to-mid teens. What could break it: private credit is the quiet threat to Ratings.

Loans that skip the rating agencies entirely could shrink the fee pool if that market keeps growing into investment-grade territory. Ratings revenue is also cyclical; a recession chokes debt issuance. Burry's Buy: Adobe (Down 23% YTD) Burry earlier this year disclosed that he was piling into Adobe (NASDAQ:ADBE).

The thesis was similar to Ackman's S&P Global logic: the market is wrongly expecting that AI will kill Adobe's business. Adobe is trading under 11 times forward earnings, versus a five-year average near 27 times. The fear is simple.

If anyone can generate an image from a text prompt, why pay for Photoshop? The bull answer has two parts. First, Adobe's moat isn't software to make images.

It's the workflow enterprises are locked into. Creative teams are trained on Adobe tools, and file formats like PSD are wired into how companies design, market, and publish. Adobe's Experience Cloud alone serves more than 12,000 enterprise customers, including most of the Fortune 500.

Switching all that out for a raw AI model isn't realistic. Story Continues Second, Adobe's own AI may widen the moat instead of shrinking it. Its Firefly model is trained on licensed content, so brands like Coca-Cola and Disney can use AI-generated work in real campaigns without copyright risk.

Companies are willing to pay Adobe to avoid legal issues. Michael Burry of Scion Asset Management What makes the stock long term: Monthly active users on free tiers jumped from 50 million to 90 million in a year — with the plan to convert them to paid subscriptions later, the same playbook that worked for Acrobat. Recurring revenue sits above $27 billion and keeps growing.

What could break it: the freemium bet is unproven. Adobe is deliberately sacrificing near-term subscription growth to chase users, and if those free users never convert, the model stalls. AI-first revenue is still tiny, under 2% of the total.

While we acknowledge the risk and potential of ADBE as an investment, our conviction lies in the belief that some AI  stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ADBE and that has 10,000% upside potential, check out our report about the cheapest AI stock . READ NEXT:  33 Stocks That Should Double in 3 Years  and  Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy .

  Disclosure: None.   Follow Insider Monkey on Google News .