Renowned investor Michael Burry is warning that the hype around artificial intelligence (AI) could lead to significant earnings downfalls for top tech companies like Meta, Oracle, Microsoft, Amazon, and Google. Burry’s concerns are centered on the rapidly aging compute infrastructure in these mega-cap firms.
According to Burry, the estimated depreciation of AI-related expenses could reach $176 billion from 2026 to 2028. He has expressed his short positions by buying put options on Nvidia and Palantir Technologies.
Despite the recent pullback in growth stocks, value names and mega caps have remained relatively stable. Analysts attribute this to a sign of narrowing leadership rather than a full market breakdown. The trend is expected to persist if interest rates remain elevated into 2026.
The final test for AI momentum comes in next week’s earnings report from Nvidia (NVDA). If the company delivers another strong quarter, Burry’s warning may look premature once again. However, if guidance softens or inventory builds indicate a decrease in datacenter demand, it could validate his concerns about AI optimism getting ahead of itself.
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Source: https://www.benzinga.com/Opinion/25/11/48810339/is-michael-burry-going-to-be-wrong-again