Prediction: Nvidia Will Overtake Apple in Stock Buybacks and Dividends Under New Apple CEO John Ternus

Apple's trailing-12-month buybacks have fallen from a $100 billion peak to $82.2 billion as new CEO John Ternus is expected to direct more capital toward hardware innovation, while product sales rose 18.1% year over year in its latest reported quarter. Nvidia returned 60% of fiscal-year-to-date free cash flow to shareholders, above its 50% target, including $19.73 billion of buybacks and $6.05 billion of dividends in its latest quarter. Nvidia forecasts 70% fiscal 2028 revenue growth as its Vera Rubin platform ramps, supporting the view that its capital returns could surpass Apple's; Nvidia trades at 24.3x earnings versus Apple's 35.8x.

Analysis

The relevant valuation shift is not simply NVDA potentially exceeding AAPL in repurchases; it is a change in what investors capitalize. NVDA can combine high incremental FCF conversion with capital return only if hyperscaler AI capex remains durable, supporting a lower perceived terminal-risk premium and potentially keeping its multiple resilient despite decelerating growth. AAPL faces the inverse: diverting cash from mechanically accretive repurchases toward hardware initiatives raises execution risk and makes its premium multiple more dependent on a demonstrable new revenue pool rather than installed-base durability.

Near term (days to 1 month), this is unlikely to move either stock absent revised capital-return authorization or management commentary, since both policies are well understood. Over 1-3 months, NVDA's platform revenue mix, gross-margin trajectory, and customer concentration disclosures matter more than the absolute buyback number; an AI infrastructure digestion signal would make buybacks look defensive rather than accretive. For AAPL, the key catalyst is whether product-led investment can sustain hardware growth without using price/promotional levers that dilute gross margin.

The contrarian view is that reduced AAPL repurchases may be economically rational if management sees a credible adjacent hardware opportunity, but the market should not award that optionality before evidence of adoption. Conversely, NVDA's apparent value case is vulnerable to the common error of annualizing peak AI system demand: at a cyclical capex peak, buybacks funded by exceptional FCF can mask a deteriorating forward earnings revision cycle. AAPL's downside is multiple compression; NVDA's downside is both multiple and earnings compression if demand visibility weakens.

Key Decisions for Investors

• Maintain a 3-6 month relative-value position: long NVDA / short AAPL, sized beta-neutral. The thesis is stronger FCF growth and earnings revisions at NVDA versus rising reinvestment/execution uncertainty at AAPL; target 10-15% relative outperformance. Stop if NVDA data-center guidance or gross-margin outlook is cut, or if AAPL demonstrates a new product category with measurable demand and margin support.
• Do not initiate a standalone AAPL short solely on lower repurchases. Set an alert around the next earnings release: consider a tactical short only if hardware growth slows materially while opex/capex accelerates and management does not quantify an offsetting revenue opportunity; that combination would challenge the stock's quality premium over the following 6-12 months.
• For NVDA longs, reduce exposure into evidence of hyperscaler capex normalization rather than headline capital-return announcements. Watch MSFT, META, GOOG and AMZN-equivalent capex guidance, NVDA backlog commentary, and networking/supply-chain indicators; a broad capex pause would overwhelm buyback support.
• Prefer owning NVDA through shares rather than chasing short-dated calls over the next 1-3 months. The article presents no new independently verified catalyst, and implied volatility exposure is unattractive unless upcoming earnings guidance or platform ramp data materially diverges from consensus.