Why is a stock price often considered to be dependent on earnings?

Investors would not invest in a stock based on how much money the company was spending on R&D or anything else, unless those costs produced a profitable product. So you're back to the product and how much profit it makes. And companies strive to make more money each year because of the time value of money. Investors want a return on their money, for the amount of risk they take, or they invest in something else with a better return for the amount of risk. Profitable opportunities to reinvest earnings usually do slow down eventually in many businesses and that is usually when companies start paying dividends. Dividend paying stocks are usually less risky and investors who cant afford so much risk usually invest in them for the income. Buybacks are usually not predictable. So it would be hard to invest for that reason. But they reduce shares outstanding and increases remaining shareholders portion of the company if its done in the open market.