Nvidia Memo vs. Michael Burry Allegations: Market Impact & Analysis

On November 24, 2025, Nvidia issued a private memo to Wall Street analysts refuting accounting allegations from investor Michael Burry. Burry had criticized Nvidia’s stock-based compensation (SBC) dilution, share buyback practices, depreciation policies, and alleged “$610 billion circular financing.” The memo corrected Burry’s claims about repurchased shares, defended employee equity grants, and denied circular financing accusations. Burry stood by his analysis, and multiple Wall Street sources confirmed the memo’s authenticity [1][2]. The debate generated social media discussion: some users criticized the memo’s Enron comparison, while others highlighted Nvidia’s profitability [6].

• Short-term reaction
  : Burry’s initial allegations (circa November 20) triggered a 7.81% drop in Nvidia’s stock to $180.64, with 343.5 million shares traded [0].
• Recovery after memo
  : On November 24, Nvidia’s stock rose 1.70% to $182.55, reflecting partial investor confidence in the company’s response [0].
• Broader context
  : Nvidia’s stock gained 2.1% on November 24 amid overall market strength, though competitive threats (Google’s TPUs, Tesla’s AI chip development) persisted [3][4][5].

• Price movements
  : Net +1.06% from November 20 to 24 (from $180.64 to $182.55) after a sharp initial drop [0].
• Volume
  : High trading activity (total 934.8 million shares over three days) indicating investor uncertainty [0].
• Volatility
  : Daily changes ranged from -7.81% to +1.70% during the period [0].

• Direct
  : Nvidia (NVDA) [0][1].
• Sectors
  : Semiconductor industry, AI hardware sector [3][5].
• Competitors
  : Google (pitching TPUs to customers), Tesla (accelerating AI chip development) [3][5].

1. Exact content of Nvidia’s private memo (not publicly available) to fully evaluate its defense [1][2].
2. Analyst rating changes post-memo (no public updates as of report time).
3. Regulatory response: Whether the SEC will investigate Burry’s allegations [missing data].
4. Specifics of Burry’s “$610 billion circular financing” claim (parties involved, evidence) [2].

Nvidia’s memo addresses some claims, but the debate underscores divergent views on AI industry accounting. Investors should weigh Nvidia’s profitability against Burry’s track record of identifying financial risks [6][1].

• Accounting volatility
  : Ongoing allegations from Burry may continue to impact Nvidia’s stock price swings [1][2].
• Competitive threats
  : Google’s TPUs and Tesla’s AI chip development could erode Nvidia’s market share over the medium term [3][5].

1. Public release of Nvidia’s memo (or analyst summaries) [1][2].
2. Burry’s next comments/actions (e.g., adjusting his Nvidia position) [1].
3. Regulatory announcements related to the allegations [missing data].
4. Competitive progress in AI chips (Google’s TPU adoption, Tesla’s chip timeline) [3][5].

: This report is for informational purposes only and does not constitute investment advice. Always conduct independent research before making financial decisions.