Michael Burry Doubles Down On AI Bubble Claims As Short Trade Backfires: Says Oracle, Meta Are Overstating Earnings By 'Understating Depreciation' - Meta Platforms (NASDAQ:META)

Core Viewpoint - Investor Michael Burry is reaffirming his bearish stance on the AI sector, particularly targeting companies like Palantir Technologies and Nvidia, despite facing losses on his nearly $1 billion short position as stock prices have rallied [2][4]. Group 1: Earnings Overstatement Claims - Burry accuses tech giants such as Meta and Oracle of "understating depreciation" by extending the useful life of assets, which he claims inflates profits [2][3]. - He estimates that Oracle and Meta will overstate their earnings by 26.9% and 20.8% respectively by 2028 due to these accounting practices [4]. Group 2: Analyst Reactions - Prominent analysts have challenged Burry's assertions, acknowledging his valid points on depreciation but questioning his technical expertise compared to industry leaders like Mark Zuckerberg and Satya Nadella [5]. - Analyst Daniel Newman noted that overstated earnings in the short term could lead to understated earnings in the long term, suggesting that Burry's claims may reflect broader issues in accounting rather than outright fraud [6]. Group 3: Historical Context and Market Sentiment - Investor Ross Gerber highlighted Burry's previous misjudgments, referencing his criticism of the GameStop rally and suggesting that Burry's current position on Palantir may lead to similar outcomes [7].