Nvidia Answers the Bubble Debate With a Record $150B Buyback as Chip Names Finally Pull Back
The AI-bubble debate (see prior revisions of this note for Burry's short and the accounting critique) got a new data point from the bull side: on Sept 28, Nvidia's board added a record $150 billion to its share buyback authorization — the largest single authorization ever, surpassing Apple's $110B from 2024 — taking total remaining repurchase authorization to $235 billion, to be worked through by fiscal 2028 (CNBC, via recap; The Edge Malaysia). The stock rose ~2% on the announcement and on Friday briefly touched a record $237 before closing at $233, aided by what the tape desk called "investor rotation into AI companies and a weaker nonfarm payrolls report."
But under the megacap surface, the high-beta end of the complex is quietly correcting. As of Friday's close: Micron -11.4% off its 52-week high (RSI 75, $1,074.89), Intel -15.3% off its high ($119.33), and Qualcomm -25.7% off its high ($184.87 — already in correction territory). The Dow fell 1.3% for the week (51,176.96) and snapped a five-month winning streak in September, while the Nasdaq made fresh highs on chip and software strength. Dispersion, not collapse.
Status of the Burry watch (SOXX -20% correction or 200-day break): no evidence yet of either at the index level — the megacaps made new highs Friday even as single names corrected hard1. The watch stays open.
Why it matters: The buyback reads two ways, and the disagreement is the point. Bulls see the strongest free-cash-flow franchise in the market putting a floor under its own equity — a $235B authorization is the endgame move of a cash machine. Bears note the timing: a record defensive authorization arriving in the same month its two closest rivals (AMD, Intel) outran it on the chart, and in the same window Micron's print showed the supply chain squeezing Nvidia's own server content growth. If the AI trade's marginal buyer shifts from the index fund to the issuer itself, the debate moves from "is the growth real" (Micron just settled that with $150B of contracted backlog — see Micron's $133B Year: Record Everything, a $150B Contracted Backlog — and a Stock That Can't Rally On It) to "what is the equity worth when the growth normalizes."
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An instance of The Magnificent Seven no longer trades as one basket. — Nvidia touched a record $237 while Micron, Intel, and Qualcomm sat 11–26% below their highs in the same week — the chip complex now trades as opposing baskets rather than one trade. ↩︎