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Nvidia increased its share buyback authorization by $150 billion, the largest ever increase and above Apple's $110 billion approval in 2024. The move lifts remaining capacity to $235 billion as strong AI chip demand generates cash.
Nvidia boosted its share buyback authorization by US$150 billion, the biggest-ever increase in a stock repurchase program. The move surpasses Apple's US$110 billion approval in 2024.
The additional authorization lifts Nvidia's remaining buyback capacity to US$235 billion, which the company expects to use through fiscal 2028. Shares of Santa Clara, California-based Nvidia rose more than 2 per cent on the news. Through Friday, the stock was up just over 20 per cent this year, broadly in line with the Nasdaq 100, though it trails some peers.
Nvidia Buyback Exceeds Many Peers Market Cap
The buyback increase exceeds the market capitalization of about 84 per cent of S&P 500 constituents, according to data compiled by LSEG. It dwarfs the US$80 billion repurchase Nvidia last announced in May. The company is making a big bet on its own stock as intensifying AI-chip competition weighs on its performance relative to peers. Strong demand for its pricey processors is generating billions in cash, and Nvidia is using part of that windfall to fund the expanded buyback.
The company ended the July quarter with US$22.44 billion in cash and cash equivalents. Our cash generation gives us the capacity to invest in the technologies that advance this transformation and return capital to shareholders, CEO Jensen Huang said in a statement. The AI buildout won't continue at its current pace forever, but Nvidia is signaling confidence that demand for its hardware and services has staying power, said Jacob Bourne, an analyst at Emarketer.
Its cash generation is currently strong enough that it believes it can continue investing heavily in the business while also returning capital to shareholders, he added. Ben Barringer, head of technology research at Quilter Cheviot, said the buyback echoes Apple's playbook of using repurchases to support its stock as growth slows and valuation multiples come under pressure.
Shares Trade At Lowest Multiples Since 2015
Nvidia shares were trading at about 16.5 times 12-month forward earnings, their lowest multiple since January 2015 and well below the 15-year average of 30, according to LSEG data. Some analysts see that as a sign of slowing profit-growth expectations. The announcement follows what had been a roughly 50 per cent slowdown in buybacks overall from July through Sept. 23. Companies turned more cautious amid heavy investment needs, partly driven by the AI boom fueling Nvidia's growth, and economic uncertainty.
Last month, Nvidia forecast about 70 per cent revenue growth for fiscal 2028, reassuring investors who have questioned how long the AI spending surge can last after years of explosive growth. Technology companies are racing to build AI infrastructure, but investors are questioning whether the massive spending boom that propelled Nvidia to become the world's most valuable company can be sustained.
Investment In Startups Draws Investor Scrutiny
Nvidia has also been investing in AI startups and cloud providers, drawing scrutiny from some investors over whether such funding indirectly supports demand for its own chips.
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CP24:Nvidia sets biggest-ever buyback plan as AI chip competition weighs on stock performanceThis story was compiled and edited by the HeadTopics newsroom and HT AI from the reports above.
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