Nvidia's board approved a $150 billion increase to its share-repurchase authorization, the largest such move in US corporate history. The company can now spend up to $235 billion on buybacks through January 2028, a signal management says reflects confidence in the AI chipmaker's long-term growth.
Nvidia's board approved a $150 billion increase to its buyback programme on Monday, and the stock rose on the news. The figure beats Apple's record $110 billion buyback, set in 2024, for the largest in US corporate history.
It is now authorized to spend up to $235 billion on share buybacks before January 2028. Jensen Huang, the company's co-founder and chief executive, said the plan reflects "confidence in the long-term opportunity ahead" from AI.
A growth story, not a slowdown signal
Large buyback authorizations often suggest management believes its shares are undervalued. But large capital returns are typically associated with a slowdown in growth at big, established companies — which is not the case here.
By contrast, Nvidia's sales continue to rise rapidly, with revenues forecast to grow about 90% this year. Fierce AI competitors including OpenAI, Anthropic and SpaceX are all huge customers, and even Google buys Nvidia's products through its cloud computing unit.
When Apple announced its $110 billion buyback in 2024, the iPhone maker held all of the top five spots for the largest such authorizations by a US company, according to Bloomberg. At the time, iPhone growth was slowing, though Apple continued to reap huge profits from its dominance of the smartphone market.
Cash generation funds the payout
Nvidia's shares have risen more than 1,200% since OpenAI debuted ChatGPT in late 2022. Still, the stock's momentum has slowed this year, rising about 20% year to date, as more investors question the sustainability of the AI boom.
The company generated almost $100 billion in free cash flow in its most recent financial year ending in January, and that figure is forecast to more than triple to $329 billion in fiscal 2028, according to consensus estimates from S&P Global's Visible Alpha. Its net income is forecast to more than double to $245 billion in the current financial year, rising to $387 billion the following fiscal year.
Goldman Sachs forecasts that AI investment will exceed $1 trillion this year, underpinning demand for the chips that power large language models such as ChatGPT, Claude and Gemini.
Sources: MarketWatch (snippet-based), Financial Times
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