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Michael Burry just called out META & the AI Bubble – My Take

November 12, 2025

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🧠 Michael Burry Just Called Out META Stock & the AI Bubble

Michael Burry, the investor who famously predicted the 2008 crash, just warned that the AI boom could be one of the “great frauds of the modern era.” He even said Meta and Oracle could be overstating their earnings by 20%+ because of how they account for depreciation on AI infrastructure.

But is he right? Let’s break it down.

💥 The AI Bubble?

  • Burry argues that big tech is inflating GAAP earnings by stretching depreciation from 3 to 6 years — making profits look better than they are.

  • His estimates show $176 billion in understated depreciation from 2026–2028.

  • The claim: companies are artificially boosting net income.

🤔 Is Michael Burry Wrong?

  • Net income can be misleading — it includes non-cash items like depreciation and unrealized gains/losses.

  • For true earning power, free cash flow and adjusted EPS give a more accurate view.

  • This same distortion once made Altria look weak when it wasn’t — the cash flows stayed strong.

  • So, yes — Burry’s technically right, but it’s mostly an accounting quirk, not a sign of real fraud.

📊 META Stock Analysis

  • Revenue per share has grown at a 30% CAGR over 10 years, and +23% YoY.

  • Gross margin: 81% Operating margin: 42% Net margin: 37%

  • Free cash flow per share: +31% CAGR (10-year).

  • Meta holds $44B in cash, has $15.6B in net debt, and started dividends + buybacks this year.

  • Dividend payout ratio <10%, making Meta a future dividend growth stock.

⚠️ The Big Risk

  • Meta’s capex doubled YoY — $18.8B last quarter, guidance up to $70–72B in 2025.

  • Zuckerberg is going all in on AI — building data centers, hiring elite talent, and forming a “superintelligence” team.

  • But unlike Microsoft or Google, Meta doesn’t sell cloud or API access yet, meaning no external monetization path for its AI investment — yet.

🧩 My Verdict

  • I don’t own Meta (yet), but the 18% sell-off could be a buying opportunity.

  • Wall Street’s consensus price target: $882, implying ~41% upside.

  • Meta’s cash generation, margins, and scale are elite — and I wouldn’t bet against Zuckerberg.

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Disclaimer: Dividend Dividend (Dividend Data LLC) is not a professional financial service. All materials released from Dividend Data (Dividend Data LLC) are for educational and entertainment purposes. Dividend Data (Dividend Data LLC) is not a replacement for a professional's opinion. Contributors to the Dividend Data (Dividend Data LLC) might have equities mentioned in the newsletter