Michael Burry Says Nvidia Spent $112.5 Billion On Buybacks Adding 'Zero' Shareholder Value — 'The True Cost...'

Core Viewpoint - Investor Michael Burry questions Nvidia's capital allocation strategy, claiming that the $112.5 billion spent on stock buybacks since 2018 has resulted in "zero" additional shareholder value [1][2]. Group 1: Buyback Analysis - Burry highlights a disconnect between Nvidia's aggressive share repurchases and the increase in the company's share count, noting that $20.5 billion has been spent on Stock-Based Compensation (SBC) since 2018 [2][3]. - Despite Nvidia reporting a substantial $205 billion in net income and $188 billion in free cash flow during the same period, Burry argues that the buybacks primarily offset SBC-related dilution [3][4]. - He points out that the buybacks resulted in 47 million more shares outstanding, suggesting that the true cost of SBC dilution was equivalent to the $112.5 billion spent on buybacks, effectively reducing owner's earnings by 50% [4][5]. Group 2: Company Performance - This critique arises as Nvidia continues to dominate the market and sees its stock price soar, driven by its significant role in the AI sector [6]. - Nvidia's recent third-quarter results showcased record revenue of $57 billion, reflecting a 62% year-over-year increase, with CEO Jensen Huang emphasizing the pervasive impact of AI [6].