Nvidia’s board on Monday approved a $150 billion increase to its share repurchase program, taking the total authorization to as much as $235 billion through January 2028. That figure surpasses the previous U.S. corporate record: Apple approved $110 billion in buybacks in 2024.
Why the company acted
Nvidia says the expansion of the buyback program reflects its confidence in the long-term opportunity from artificial intelligence (AI). Jensen Huang, Nvidia’s co-founder and CEO, told the Financial Times that the company’s cash-generating ability allows it to invest in transformative technologies while also returning capital to shareholders.
Financial performance and outlook
- Nvidia expects revenue to rise by roughly 90 percent this year.
- In the most recent fiscal year ending in January, the company generated nearly $100 billion of free cash flow.
- S&P Global Visible Alpha’s consensus projects free cash flow could grow to $329 billion in the fiscal year 2028.
- Net income is forecast to more than double to $245 billion this fiscal year and could reach $387 billion in the fiscal year ending January 2028.
Market reaction and stock performance
Since the end of 2022, following the appearance of ChatGPT, Nvidia’s shares have climbed more than 1,200 percent, although the rally has slowed: year-to-date gains are about 20 percent. In pre-market trading on Monday the shares were up 1.4 percent.
Customers and demand drivers
Major buyers of Nvidia’s products include OpenAI, Anthropic and SpaceX, and Google is also a significant purchaser through its cloud business. The company’s growth has been driven by strong demand for AI infrastructure and accelerated computing.
What the large buyback signals
Large buybacks can indicate management believes the stock is undervalued and that the company has ample capital to return to shareholders; they are also commonly associated with more mature firms whose organic growth is slowing. In Nvidia’s case, the company still projects rapid growth: Huang said management expects demand to remain near record levels and predicted that chip sales could double next year compared with this year.
Summary
By increasing its repurchase authorization by $150 billion, Nvidia has set a new U.S. corporate record with up to $235 billion available for buybacks through January 2028. The announcement comes as the company reports strong cash generation, outsized revenue and profit forecasts, and sustained demand from major AI customers, even as the stock’s earlier rapid ascent has cooled.
