Hua Er Jie Jian Wen·2025-11-11 02:35Core Viewpoint - Michael Burry, known for predicting the 2008 financial crisis, has raised concerns about major tech companies artificially inflating profits by extending the "useful life" of their assets, leading to an estimated $176 billion in overstated profits from 2026 to 2028 [1][4]. Group 1: Accounting Practices - Burry accuses tech giants of using accounting "tricks" to underestimate depreciation, thereby inflating earnings [3][4]. - He highlights that companies like Meta, Alphabet, Microsoft, Oracle, and Amazon are extending the depreciation period of their hardware, which typically has a product cycle of 2 to 3 years, to as long as 6 years [4][5]. Group 2: Future Profitability Concerns - Analysts from Bank of America and Morgan Stanley warn that the market is underestimating the future depreciation expenses of tech companies, which could lead to actual profitability being significantly lower than current market expectations [2][6]. - Bank of America estimates that by 2027, the depreciation expenses for Google, Meta, and Amazon could be underestimated by nearly $16.4 billion, indicating a potential decline in their actual profitability [6]. Group 3: Capital Expenditure and Investment Trends - Morgan Stanley notes that the capital expenditure intensity of tech giants is nearing peak levels seen during the internet bubble, yet public data does not fully reflect the scale of these investments [7][8]. - The rise of financing leases is contributing to the underreporting of actual investment levels, with Microsoft’s capital expenditure to sales ratio projected to increase significantly by 2026 when accounting for these leases [8].