GOOG Stock Sinking: What the Price Dip Means vs. Investor Reactions

Generated Title: Michael Burry's Google "Fraud" Call: Genius or Just Another Doomsday Rant?

Alright, so Michael Burry – the guy who made a fortune betting against the housing market back in '08 – is now screaming about accounting fraud at Google and other "hyperscalers." Specifically, he's accusing them of understating depreciation to pump up their earnings. Is this the second coming of the Big Short, or is Burry just shouting at clouds again?

The Accusation: Cooking the Books in Silicon Valley

Burry's claim, laid out on X (formerly Twitter, because of course it is), is that these tech giants are artificially extending the useful life of their assets to make their profits look bigger than they really are. He estimates this could lead to $176 billion in understated depreciation between 2026 and 2028. He even calls out Oracle and Meta specifically, accusing them of overstating earnings by a huge margin.

Now, let's be real, accounting ain't exactly a straightforward science. There's always room for interpretation, for "creative" accounting. Are these companies deliberately misleading investors, or are they just using perfectly legal (if aggressive) accounting methods? Burry is saying Alphabet doubled the network/compute useful life to six years since 2020. The question is whether that's a reasonable assessment of the lifespan of their tech, or a blatant attempt to juice the numbers.

And here's where it gets interesting. Burry says he'll drop more details later this month. November 25th, to be exact. So we're all just sitting here, waiting for the other shoe to drop. Will he have concrete evidence, or just more vague accusations?

Google's Response: Business as Usual (For Now)

While Meta and Oracle took a hit after Burry's initial blast, Google's stock price kept climbing. The Google parent’s market cap has topped $3.5 trillion, and it looks well-placed to join the $4 trillion market cap club. Maybe investors don't care about accounting technicalities, or maybe they just don't believe Burry. Or maybe they're too busy focusing on Google's shiny new quarterly revenues topping $100 billion for the first time. Is GOOG Stock a Buy or Sell as Michael Burry Accuses Hyperscalers of ‘Fraud’?

Google Search is still printing money, Google Cloud is growing like crazy, and they're even selling their TPUs (Tensor Processing Units) to third parties. And let's not forget Waymo, their self-driving car venture, expanding into new markets.

But here's the thing: even if Google is hitting all the right financial notes, Burry's accusations could still sting. A whiff of scandal can spook investors, especially when it comes from a guy with Burry's track record. And let's not forget that the European Commission is breathing down Google's neck again, threatening massive fines over its "site reputation abuse policy." It's always something with these guys, ain't it?

The Bigger Picture: AI Hype and the Coming Reckoning

Burry's "fraud" call isn't just about Google; it's about the entire AI bubble. He's been warning about this for a while, and he's not the only one. The massive investments in AI infrastructure are going to lead to a "wall of depreciation," and that's going to hit these companies' bottom lines hard.

The question is, will the growth in AI revenues be enough to offset the increased depreciation expenses? Or are we heading for a major correction? The answer probably depends on whether you believe the AI hype or think it's all just smoke and mirrors.

Then again, maybe I'm just being a grumpy old cynic. Maybe AI really is the future, and these companies are all geniuses who deserve their sky-high valuations. But I doubt it.

Is This the End or Just the Beginning of the End?

Look, I don't know if Burry's right or wrong. But I do know that Wall Street has a long history of ignoring warning signs until it's too late. Remember Enron? WorldCom? These companies were all cooking their books in plain sight, and nobody cared until the whole thing blew up. So, while I'm not selling my Google stock just yet, I'm definitely keeping a close eye on this situation. And I suggest you do the same.

So, What's the Real Story?

It's simple: Wall Street is due for a rude awakening.