On November 10, 2025, the so-called ‘Big Short’ investor Michael Burry criticized some of the leading tech companies on X, accusing them of artificially boosting their earnings in “one of the more common frauds of the modern era.”

Among his targets was Oracle (NYSE: ORCL), a Texas-based artificial intelligence (AI) leader that Burry predicted would greatly overstate its earnings in the next couple of years.

“Understating depreciation by extending useful life of assets artificially boosts earnings — one of the more common frauds of the modern era…. Yet this is exactly what all the hyperscalers have done. By my estimates they will understate depreciation by $176 billion 2026-2028. By 2028, ORCL will overstate earnings 26.9%…,” the investor wrote.

Exactly one month later, on December 10, Oracle posted its quarterly earnings, missing Wall Street expectations while reporting a substantial increase in AI spending.

As a result, Oracle shares tumbled nearly 12% in after-hours, where they sat at $197.10 at press time, December 11, renewing valuation fears among shareholders who’ve now been left debating whether the firm can justify its data center expenses.

Was Michael Burry right about ORCL share valuation?

Oracle revenue for the fiscal second quarter came in at $16.06 billion, up 14% from a year earlier but slightly below the $16.21 billion consensus estimate. Cloud-infrastructure revenue surged 68% to $4.1 billion, narrowly missing expectations, while earnings per share (EPS) came in at $2.26, well above the $1.64 forecast.

Meanwhile, Oracle software sales slipped 3% to $5.9 billion, falling short of the $6.06 billion analyst estimate. For the third quarter, Larry Ellison’s company projected revenue growth of 19% to 21%, largely matching Wall Street’s 19% outlook.

Burry’s warnings are now in the spotlight again, as scrutiny over Oracle’s debt-driven expansion to support AI infrastructure becomes more intense. The panic makes sense even beyond the earnings report, which has alone wiped approximately $70 billion off Oracle’s market cap. 

Namely, the company raised $18 billion in bond offerings a couple of months ago, just as it announced a $300 billion deal with OpenAI on September 10. Since then, ORCL shares have sunk around 40%.

All in all, Oracle’s AI debt gamble continues to amplify not only Burry’s but broader market concerns about the AI ecosystem, where tech giants are increasingly dependent on one another’s financing and positive investor sentiment.

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