Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Famed “Big Short,” investor Michael Burry, known for his prescient bet against the housing market, has publicly questioned Nvidia Corp.‘s (NASDAQ:NVDA) capital allocation strategy, asserting that the tech giant’s $112.5 billion spent on stock buybacks since 2018 has effectively yielded “zero” additional shareholder value. Nvidia's Massive Buybacks Added Zero Shareholder Value In an X post, Burry dissected ...

Core Insights - The five largest corporations by market cap—Microsoft, Nvidia, Apple, Amazon, and Alphabet—have a combined market value exceeding $16 trillion and generate billions in annual profits, contributing tens of billions in taxes [2][3] - Over the past five years, these companies have spent more than $1 trillion on stock buybacks and dividends, significantly outpacing their federal tax payments during the same period [3][6] - In 2024, the entire S&P 500 spent nearly $1.6 trillion on stock buybacks and dividends, which is three times the total income of the poorest 27 million U.S. households, estimated at $498 billion [4] Shareholder Payouts - There has been an unprecedented level of shareholder payouts in recent years, which includes both dividends and stock buybacks [4][5] - Oxfam's analysis indicates that funds allocated for shareholder payouts could have been used for internal investments, such as increasing worker wages or enhancing sustainability [6] Corporate Tax Trends - Corporate taxes have declined since the 2017 Tax Cuts and Jobs Act, reducing effective tax rates for large corporations from an average of 22% to 12.8% [7] - If the five largest companies had paid taxes at pre-TCJA rates, they would have contributed an additional $168 billion in taxes over the past five years [7] Economic Inequality - The current trend of shareholder payouts disproportionately benefits the top 1% and wealthy executives, while the bottom half of the U.S. population holds only 1% of the stock market [8][9] - Tax savings from corporations are not being reinvested into workers or consumers but are instead directed towards enriching shareholders and executives [9] Potential for Policy Change - There is an opportunity for policymakers to address these trends through measures such as taxing or banning buybacks, capping dividends, and reforming the corporate tax code [10] - The analysis highlights that corporations can drive inequality, but also indicates the possibility for change through policy interventions [10]

Core Insights - U.S. companies are on track to achieve a record $1.1 trillion in share buybacks by the end of 2025, with $1 trillion already announced as of August 20, 2025 [1][4] - Despite the high dollar value of buybacks, the number of companies announcing buybacks has reached an all-time low, with only 34 announcements in Q3 2025 [1][4] - Buybacks among S&P 500 companies fell by 20% in Q2 2025, totaling $235 billion compared to $293 billion in Q1 2025 [2][3] Buyback Trends - The top 20 S&P 500 companies accounted for 51.3% of total buyback authorizations in Q2 2025, significantly above the historical average of 44.5% [3][4] - Major contributors to buybacks include technology giants like Apple and Alphabet, as well as banks such as JPMorgan Chase, Bank of America, and Morgan Stanley [3] Economic Context - Companies are utilizing buybacks as a strategic method to deploy excess capital amidst trade policy uncertainty, which has affected business planning and spending [6] - Robust earnings growth and tax cuts have contributed to increased corporate cash reserves, supporting the stock market rally [5][6] Future Outlook - The Q3 earnings season beginning October 14, 2025, will be crucial for monitoring buyback announcements, which may indicate corporate confidence and willingness to invest in shareholder value [7]

Core Insights - Stock buyback activity is expected to recover after a slowdown in the first half of 2025, with S&P 500 buybacks in Q2 falling 20% from record highs in Q1, but anticipated to increase in the current quarter [2][5] - Analysts indicate that buybacks may not significantly contribute to earnings per share (EPS) growth as they have in the past, with major companies showing no meaningful year-over-year growth in buybacks [3][4] - The S&P 500's buyback yield has reached its lowest level in 20 years, at around 2%, partly due to increased spending on artificial intelligence, which has reduced share repurchases [4][6] Buyback Activity Trends - The decline in buyback yield is expected to stabilize as repurchase activity increases, with estimates suggesting total share repurchases could reach $1 trillion this year, a 5% increase from 2024 [5][7] - Companies that consistently engage in buybacks, referred to as "buyback aristocrats," may benefit from a rising scarcity premium, showing larger market caps and higher year-to-date returns compared to the broader index [6][7]