Burry’s Tech Depreciation Short: Genius or Misguided?

Michael Burry shorts tech giants like Meta & Nvidia, alleging depreciation underestimation. Experts question his tech analysis depth, citing GameStop experience. $1B bet faces scrutiny as stocks rally.

Daniel Newman, CEO of The Futurum Group, acknowledged that Burry elevated a legitimate factor regarding depreciation practices at major technology companies but questioned whether he had the technological deepness to analyze the beneficial life of their properties as accurately as Meta’s Mark Zuckerberg or Microsoft Corp. (NASDAQ: MSFT) Chief Executive Officer Satya Nadella.

Burry’s Tech Short Thesis

As stocks rallied on Monday, Burry doubled down on his bearish wagers versus Palantir Technologies Inc. (NASDAQ: PLTR) and Nvidia Corp. (NASDAQ: NVDA), alongside the more comprehensive AI industry, even as his virtually $1 billion wager began turning against him.

He added, “You ‘d believe he would certainly have gained from the GameStop mess,” describing Burry’s objection of GameStop Corp.’s (NYSE: GME) retail-driven rally in 2021, which he described as being “Unnatural, Insane, And Dangerous,” a warning which did little to cool the frenzy.

GameStop Echoes and Warnings

Burry described this as one of the “more common frauds of the contemporary age,” used to blow up revenues, and is something that he stated all of the hyperscalers have given that considered. “They will understate depreciation by $176 billion” through 2026 and 2028, he stated.

“This isn’t the same as shorting NINJA financings for houses,” Newman stated, describing Burry’s early specialty, when he shorted subprime mortgages in the lead as much as the global financial situation in 2008, which was the subject of the 2015 flick, “The Huge Short.”

Expert Skepticism on Tech Analysis

In a message on X, Burry charged tech titans such as Meta Platforms Inc. (NASDAQ: META) and Oracle Corp. (NYSE: ORCL) of “underrating depreciation” by expanding the helpful life of assets, particularly chips and AI facilities.