Mike Burry says Oracle will overstate earnings by 27% and Meta by 21% due to depreciation gimmic

Michael Burry has accused two of America’s biggest tech players, Oracle and Meta, of using what he calls “depreciation gimmicks” to exaggerate their profits from the AI boom, according to CNBC. The Scion Asset Management founder said that the major cloud and AI infrastructure companies, what he called “hyperscalers,” are bending accounting rules to make their earnings look stronger than they really are. Burry warns of overstated profits in ORCL, META through 2028 In a post Monday on X, Burry said these tech giants are understating depreciation expenses by pretending their AI chips and servers will last longer than they actually do. “Understating depreciation by extending useful life of assets artificially boosts earnings—one of the more common frauds of the modern era,” he wrote. Burry added that companies massively increasing capital spending on Nvidia chips and servers with two-to-three-year product cycles should not be extending the lifespan of that hardware...

https://www.cryptopolitan.com/mike-burry-oracle-meta-overstate-earnings/