Nvidia announces record $150 billion share buyback amid AI boom

Nvidia has increased its share buyback authorisation by a record $150 billion, taking its total remaining repurchase capacity to $235 billion as the chipmaker bets on continued demand for artificial intelligence hardware amid intensifying competition.The increase surpasses Apple’s $110 billion buyback authorisation in 2024 and comes as investors question whether the massive spending on AI infrastructure that has driven Nvidia’s rapid growth can continue at its current pace.Shares of Nvidia, based in Santa Clara, California, rose more than 2%. The stock was up just over 20% this year through Friday, broadly in line with the Nasdaq 100 but well behind AMD, whose shares have more than doubled, and Intel, which has more than tripled.Nvidia said it expects to deploy the remaining $235 billion in buyback capacity through fiscal 2028. The company is generating billions of dollars in cash from strong demand for its processors, allowing it to increase shareholder returns while continuing to invest in its business.“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 told Reuters.“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.Nvidia shares were trading at about 16.5 times their 12-month forward earnings, their lowest multiple since January 2015 and below the 15-year average of 30, according to LSEG data. Some analysts see the lower valuation multiple as a sign that investors expect slower profit growth.Nvidia’s growth outlook remains closely tied to the global AI infrastructure boom. Last month, the company forecast about 70% revenue growth for fiscal 2028, reassuring investors who have questioned how long the AI spending surge can continue after years of rapid growth.“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 company ended the July quarter with $22.44 billion in cash and cash equivalents. Nvidia had last announced an $80 billion share buyback in May.The latest $150 billion increase in its buyback authorisation is larger than the market capitalisation of about 84% of S&P 500 companies, according to LSEG data. Nvidia’s latest buyback signals that the company remains confident in the durability of demand for its AI chips and services.You use AI every day. Now get your AI Quotient. Take the AIQ test.