Nvidia Announces Record $150 Billion Share Buyback Amid AI Boom
The chipmaker's increased repurchase authorization comes as its stock trades near its lowest valuation in over a decade.
Nvidia has boosted its share buyback authorization by a record $150 billion, a move that surpasses Apple's $110 billion approval from earlier this year. The announcement comes as the semiconductor giant's stock hovers near its lowest valuation in more than a decade.
Shares of the Santa Clara, California-based company, which has a market capitalization exceeding $5.5 trillion, saw an increase of more than 2% in morning trading. Year-to-date, the stock has appreciated by over 20% as of Friday's close.
The expanded authorization effectively raises Nvidia's remaining buyback capacity to $235 billion. The company anticipates utilizing these funds through fiscal 2028, driven by robust cash generation fueled by surging demand for AI training and inference.
Nvidia shares were trading at approximately 16.5 times their 12-month forward earnings. According to LSEG data, this represents the lowest multiple since January 2015 and falls significantly below the 15-year average of 30, a metric some analysts interpret as an indicator of decelerating profit-growth expectations.
This substantial buyback increase follows a broader slowdown in stock repurchases across the market, which reportedly decreased by about 50% between July and September 23.
"Our cash generation gives us the capacity to invest in the technologies that advance this transformation and return capital to shareholders," stated CEO Jensen Huang. Nvidia's $150 billion buyback increase is notable, as it exceeds the market capitalization of roughly 84% of companies within the S&P 500.
Last month, Nvidia projected revenue growth of approximately 70% for fiscal 2028, aiming to reassure investors concerned about the sustainability of the AI spending surge after years of exponential growth. The company has also been actively investing in AI startups and cloud providers, a strategy that has drawn attention from some investors regarding its potential indirect support for demand for Nvidia's own chips.
Nvidia concluded the July quarter with $22.44 billion in cash and cash equivalents.