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Michael Burry Critiques Nvidia’s Accounting Practices
Investor Michael Burry, known for his successful bet against the housing market prior to the 2008 crash, is currently bearish on Nvidia (NASDAQ: NVDA). He expressed concerns that many AI companies are participating in what he describes as “one of the more common frauds of the modern era,” related to misleading accounting practices regarding asset depreciation.
Burry argues that many firms are extending the useful life of Nvidia GPUs to artificially boost earnings. He suggests that instead of depreciating a $6 billion GPU purchase over six years, a three-year depreciation would be more appropriate, suggesting an annual charge of $2 billion instead of $1 billion. Burry has also invested heavily in put options on Nvidia, betting against its stock.
Despite Burry’s stance, most analysts maintain a hold or buy rating on Nvidia, highlighting a significant divide in market sentiment regarding the tech giant’s future.
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