AI Spending Erodes Shareholder Returns; Barron's Advises Options Strategy to Generate Income

Barron's reported on May 27, 2026, that trillions in AI capital spending are eroding dividends and buybacks, leaving even robust corporate results unable to lift shares. Nvidia (NVDA) boosted its dividend and expanded buybacks after strong Q1 earnings, but its stock weakened as AI spending concerns dominated. Meta Platforms (META) eliminated 8,000 jobs, a move that historically lifts shares, yet the stock stayed under pressure. To offset diminished cash returns, Barron's recommends selling covered calls on holdings to collect option premium, effectively creating a synthetic dividend. The strategy provides income if shares stay flat but caps gains if the stock surges. The report expects the tension between short-term shareholder demands and long-term AI bets to intensify, particularly while the Federal Reserve keeps interest rates elevated.