Analysis Report: Michael Burry's Criticism of Nvidia's Buyback Strategy

On November 21, 2025 (EST), investor Michael Burry criticized Nvidia Corporation (NVDA) for its $112.5 billion in share buybacks since 2018. Burry argued the buybacks added “zero” shareholder value by merely offsetting stock-based compensation (SBC), resulting in a net increase of 47 million shares outstanding and distorting owner earnings by 50% [1][2]. His comments followed Nvidia’s Q3 2025 earnings report, which highlighted continued growth in its data center segment [1].

Nvidia’s stock declined 7.81% on November 20 and an additional 1.30% on November 21, closing at $178.88 [3]. The two-day drop reduced Nvidia’s market capitalization from ~$4.71 trillion to ~$4.36 trillion, erasing approximately $350 billion in value [3][4].

Despite the criticism, analyst consensus remains “BUY” with 73.4% of analysts recommending the stock and a consensus price target of $250.00 (+39.8% from current levels) [4]. Nvidia’s CEO Jensen Huang noted plans for continued buybacks during the Q3 earnings call, emphasizing strategic investments in AI ecosystem partners [1][10].

Contrary to Burry’s claim of increased share count, public data shows Nvidia’s shares outstanding decreased from 25.28 billion in 2018 to ~24.366 billion in November 2025, a net reduction of ~914 million shares [5][6]. This discrepancy suggests potential differences in time frames or calculation methodologies.

The initial company overview tool reported an incorrect ROE of 1.04% [4]. Reliable sources indicate Nvidia’s trailing twelve-month ROE as of September 2025 is 105.22% (Wisesheets) to 116.55% (GuruFocus), reflecting strong profitability [7][8]. Key verified metrics include:

• Data center revenue: 88.3% of FY2025 revenue ($115.19B) [4]
• Net profit margin: 53.01% [4]
• Current ratio: 4.47 [4]

Burry’s analysis claims $112.5B in buybacks offset $20.5B in SBC since 2018 [2]. While full SBC data is not publicly available, Nvidia’s share count reduction indicates buybacks exceeded SBC dilution over the period [5][6].

1. Nvidia’s official response to Burry’s specific claims about share count and owner earnings distortion
2. Detailed breakdown of SBC vs buyback spending since 2018
3. Independent verification of Burry’s “circular demand” allegation regarding customer financing [9]

• Burry’s View
  : Criticizes capital allocation efficiency and accounting practices, arguing economic earnings are half of reported figures [2][9]
• Nvidia’s Growth
  : Dominant market position in AI infrastructure (88% revenue from data center) [4]
• Market Context
  : Nvidia outperformed the Nasdaq Composite by 17.83% year-to-date (34.86% vs.17.03%) [1][10]

1. Accounting Scrutiny
   : Burry’s warnings about revenue recognition and SBC impact may lead to increased investor skepticism [2][9]
2. Valuation Risk
   : High P/E (43.87x) and P/B (36.60x) ratios make Nvidia susceptible to market corrections [4]
3. Regulatory Risk
   : Continued criticism of accounting practices may attract regulatory attention to tech sector buyback policies

Users should be aware that Michael Burry’s high-profile criticisms regarding Nvidia’s capital allocation and accounting transparency may significantly impact short-term investor sentiment, despite the company’s strong financial performance [1][2]. Historical patterns suggest such allegations can lead to increased volatility in high-growth tech stocks, even when underlying fundamentals remain robust [10][9].

[0] Ginlix Analytical Database
[1] Benzinga. “Michael Burry Says Nvidia Spent $112.5 Billion On Buybacks Adding Zero Shareholder Value.” https://www.benzinga.com/markets/equities/25/11/48969280/michael-burry-says-nvidia-spent-112-5-billion-on-buybacks-adding-zero-shareholder-value-the-true-cost (2025-11-20)
[2] Finbold. “Here’s how much Michael Burry is down on his Nvidia stock bet.” https://finbold.com/heres-how-much-michael-burry-is-down-on-his-nvidia-stock-bet/ (2025)
[3] Get Stock Daily Prices Tool (NVDA: 2025-11-20 to 2025-11-21)
[4] Company Overview Tool (NVDA: Retrieved 2025-11-22 UTC)
[5] MacroTrends. “NVIDIA Shares Outstanding 2012-2025.” https://www.macrotrends.net/stocks/charts/NVDA/nvidia/shares-outstanding (2025)
[6] CompaniesMarketCap. “NVIDIA Shares Outstanding.” https://companiesmarketcap.com/nvidia/shares-outstanding/ (2025)
[7] Wisesheets. “NVIDIA Corporation ROE.” https://www.wisesheets.io/roe/NVDA (2025)
[8] GuruFocus. “NVDA ROE %.” https://www.gurufocus.com/term/roe/NVDA (2025)
[9] LinkedIn. “What Michael Burry Is Really Saying About Nvidia’s Accounting.” https://www.linkedin.com/pulse/what-michael-burry-really-saying-nvidias-accounting-sahil-kapoor-3sg3f (2025)
[10] Yahoo Finance. “Michael Burry Says Nvidia Spent $112.5 Billion On Buybacks.” https://finance.yahoo.com/news/michael-burry-says-nvidia-spent-193113290.html (2025)

Note: All references comply with credibility tiers, prioritizing Tier 1 and Tier 2 sources for financial data and news reporting. This analysis does not constitute investment advice.