Michael Burry analyzed 1,000+ reports and found a $1.7 trillion 'earnings illusion' hiding in tech stocks

Michael Burry analyzed 1,000+ Nasdaq 100 annual reports over the past decade and argues tech earnings have been materially overstated by mis‑accounting stock‑based compensation (SBC). He estimates Wall Street has guided investors to 42% more earnings than actually existed, creating a $1.7 trillion “earnings illusion” that inflates valuations across major tech names. The analysis raises downside risk for tech‑heavy indexes and retirement portfolios (many concentrated in tech), prompting calls to diversify into alternatives like gold. Market takeaway: US Tech 100 valuation metrics may be distorted, increasing potential for a sector correction and higher volatility for broad indices.