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.

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Nvidia's Massive Buybacks Added Zero Shareholder Value

In an X post, Burry dissected Nvidia’s financial data, highlighting a disconnect between aggressive share repurchases and the company’s rising share count. Burry’s analysis points to Nvidia’s $20.5 billion in Stock-Based Compensation (SBC) since 2018.

While the company reported a robust $205 billion in net income and $188 billion in free cash flow over the same period, Burry argues that the $112.5 billion dedicated to buybacks primarily served to offset stock-based compensation (SBC)-related dilution.

“But it bought back $112.5B worth of stock and there are 47 million MORE shares outstanding,” Burry tweeted, adding, “The true cost of that SBC dilution was $112.5B, reducing owner's earnings by 50%.”

He suggests that the company's expenditures on buybacks were merely a defensive maneuver against dilution rather than a genuine reduction in outstanding ...