Nvidia Memo Refuting Burry's Accounting Claims & Competitive Risks from Google-Meta Chip Deal

Nvidia issued a private memo to Wall Street analysts on November 24-25, 2025, refuting accounting allegations from Michael Burry, who compared the company to Enron and criticized its stock-based compensation (SBC) dilution and buybacks [1]. The memo corrected Burry’s claim about repurchased shares ($91B vs. Burry’s $112.5B) and defended its GPU depreciation schedule (4-6 years) as aligned with real-world utilization [1]. Concurrently, news of Google negotiating a multibillion-dollar AI chip deal with Meta emerged, adding competitive pressure on Nvidia’s market share [2]. These dual events contributed to NVDA’s 3.64% stock price drop to $175.90 on November 25 [0].

Cross-domain connections include:

1. The memo’s Enron reference (even as a refutation) may have unintended negative sentiment impact, amplifying market concerns.
2. Google’s expansion into AI chip sales to major customers like Meta (a key Nvidia client) signals a shifting competitive landscape in the AI hardware sector [2].
3. Burry’s high-profile short position ($1B+) and ongoing criticism (comparing Nvidia to Cisco’s 2000 telecom bubble) continue to influence investor sentiment [1].

• Competitive Risk: Google’s chip deal with Meta could erode Nvidia’s AI chip market share [2].
• Sentiment Risk: Burry’s public criticism may drive volatility in NVDA’s stock [1].
• Valuation Risk: NVDA’s elevated P/E ratio (43.54) leaves it vulnerable to downward revaluation [0].
• Accounting Transparency Risk: Investors should monitor upcoming disclosures for clarity on SBC and depreciation practices [1].

• Nvidia’s strong profitability may mitigate short-term sentiment impacts, though competitive threats remain.

Nvidia refuted Burry’s accounting allegations in a private memo, correcting claims about share repurchases and depreciation. Concurrently, Google’s potential chip deal with Meta poses competitive risks. NVDA’s stock dropped 3.64% due to these combined factors. Key metrics include NVDA’s market cap ($4.28T) and P/E ratio (43.54) [0]. Decision-makers should seek additional data on Nvidia’s buyback execution, analyst consensus post-memo, and competitive market share projections.