Big Tech 'indigestion' warning

In a post on X, Michael Burry accused hyperscalers of lengthening useful‑life assumptions for GPUs and servers to understate depreciation and “artificially boost” earnings, calling the practice one of the more common modern‑era frauds. (cnbc.com)) Burry’s modeling put the potential understatement of depreciation at roughly $176 billion across the industry for 2026–2028, which he said could translate into near‑term earnings inflation on the order of ~20% for the group. (247wallst.com)) His calculations singled out specific firms, estimating Oracle’s earnings could be overstated by about 26.9% and Meta’s by about 20.8% by 2028 if current depreciation assumptions aren’t revised. (economictimes.indiatimes.com)) The Roundhill Magnificent Seven ETF (MAGS) — equal‑weight exposure to Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla — fell roughly 16.0% year‑to‑date through March 29, underperforming broad benchmarks over the same stretch. (articles.stockcharts.com)) MAGS holds concentrated positions in the seven names, reports roughly $3.45 billion in net assets and was launched in April 2023, with a 0.29% expense ratio listed by fund providers. (finance.yahoo.com)) The Invesco QQQ Trust, tracking the Nasdaq‑100, logged about a 9.1% decline for the quarter — its worst quarterly drop since mid‑2022 by several data measures — underscoring the pullback in mega‑cap growth names. (financecharts.com)) Burry warned that as stock prices and investor sentiment wobble, questions about AI capex returns and accounting for rapidly depreciating hardware could pressure hyperscalers’ reported profits and capital‑spending plans. (inshorts.com))