Michael Burry, the famed investor behind The Big Short, warned that major technology firms could be overstating profits by billions through aggressive accounting of equipment depreciation. He estimates that Oracle and Meta could inflate earnings by 26.9% and 20.8%, respectively, by 2028 due to understated depreciation costs.
According to Burry, many large tech companies have begun extending the lifespan of servers and AI hardware from two to five years, effectively lowering annual depreciation expenses. This accounting shift makes profits appear stronger even as capital expenditures surge, particularly from purchases of NVIDIA chips and high-end data center infrastructure.
Burry projects that between 2026 and 2028, total depreciation understatement across major firms could reach $176 billion. He plans to release a detailed report later this month, warning that such practices may distort valuations and investor expectations.
