Michael Burry Questions Sustainability of AI Boom
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 22 2026
0mins
Should l Buy NVDA?
Source: seekingalpha
- AI Investment Risks: Renowned investor Michael Burry expressed concerns over tech giants' massive spending on AI data centers, warning that such expenditures could jeopardize cash flow and profitability, especially with projected capital expenditures reaching $700 billion, potentially leading to future financial crises.
- Accounting Controversies: Burry criticized tech companies for employing accounting tricks to obscure expenses, arguing that this could severely distort earnings, particularly for firms like Nvidia and Meta, which may underestimate depreciation by $176 billion between 2026 and 2028, impacting investor decisions.
- Free Cash Flow Crisis: Amazon is projected to experience negative free cash flow in 2026, ranging from -$17 billion to -$28 billion, while Alphabet's free cash flow is expected to plummet by 90%, from $73.3 billion to $8.2 billion, indicating increasing financial strain on major tech firms.
- Market Reactions and Historical Parallels: Burry compared the current AI enthusiasm to the radio boom of the 1920s, noting that while radio's growth persisted for decades, stocks like RCA fell 98% in the early 1930s, reminding investors to exercise caution in pursuing AI investments to avoid repeating past mistakes.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 175.750
Low
200.00
Averages
264.97
High
352.00
Current: 175.750
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is an artificial intelligence (AI) infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. Its segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing and networking platforms and AI solutions and software, and automotive platforms and autonomous and electric vehicle solutions, including software. The Graphics segment includes GeForce GPUs for gaming and personal computers (PCs), and Quadro/NVIDIA RTX GPUs for enterprise workstation graphics. Its technology stack includes the foundational NVIDIA CUDA development platform that runs on all NVIDIA GPUs, as well as hundreds of domain-specific software libraries, frameworks, algorithms, software development kits (SDKs), and application programming interfaces (APIs). Its platforms address four markets, which include Data Center, Gaming, Professional Visualization, and Automotive.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Need for Strategic Adjustments: In this market environment, investors must consider adjusting their investment strategies to quickly capitalize on opportunities when the stock market rebounds, ensuring maximum returns during future recoveries.
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