Analysis of Michael Burry's Critique of Nvidia's $112.5B Buyback Program

This analysis examines Michael Burry’s Nov 21,2025 claim that Nvidia’s $112.5B buybacks since 2018 added zero shareholder value by offsetting stock-based compensation (SBC) and increasing share counts [Initial Event]. Contrary to Burry’s assertion, internal data [0] and external sources [1][2] show Nvidia’s basic share count decreased slightly from 25.28B (2018) to ~24.5B (2025). Total SBC from 2018-2025 is estimated at ~$25-30B (far below $112.5B) [1]. The market reaction was muted: NVDA rose 0.69% on Nov21 with 154% of average volume, likely due to concurrent news of potential H200 chip sales to China [0][3]. Nvidia’s management defended its capital allocation strategy, emphasizing growth and supply chain security [4][5].

1. Regulatory news (China chip sales) can offset bearish sentiment from high-profile critiques.
2. The debate over buybacks vs SBC highlights the need for investors to verify diluted vs basic share counts.
3. Premium valuation (P/E ratio of 44.91 [0]) makes NVDA sensitive to negative narratives, even if data contradicts claims.

• Risks
  : NVDA’s high P/E ratio (44.91) exposes it to valuation risk [0]; regulatory decisions on China chip exports remain uncertain [3]; ongoing debates about SBC and buyback accounting could impact investor sentiment [4].
• Opportunities
  : Approval of H200 chip sales to China could boost revenue [3]; strong demand for AI GPUs (per Jensen Huang [5]) supports long-term growth.

• Burry’s claim about share count increase and full SBC offset of buybacks is not supported by available data [1][2].
• NVDA’s market cap is $4.43T with a P/E ratio of 44.91 [0].
• Affected instruments include NVDA, semiconductor peers (AMD, INTC), and AI ecosystem stocks (MSFT, GOOGL) [0].
• Investors should monitor regulatory updates on China chip sales and verify diluted share count data [3].