NVIDIA announced an additional $150 billion share buyback plan, setting a new record for the largest buyback in U.S. corporate history and surpassing Apple's previous $110 billion mark. CEO Jensen Huang said this move underscores confidence in the long-term opportunities of AI. Boosted by this news, NVIDIA's stock price rose as much as 1.3% in pre-market trading on Monday, after earlier falling nearly 1%.
As it continues to reap massive profits from its top-tier position in the AI supply chain, NVIDIA announced an additional stock buyback program worth up to $150 billion, setting a record for the largest buyback in U.S. corporate history.
The world's highest-valued company said on Monday that its Director had approved an increase of $150 billion to its share buyback program. Combined with its existing plans, NVIDIA is now authorized to spend up to $235 billion on stock repurchases by January 2028. Boosted by this news, NVIDIA's stock rose more than 3% in early trading.
NVIDIA co-founder and CEO Jensen Huang stated on Monday that this new initiative reflects the company's confidence in the "long-term future opportunities" of the AI sector. He emphasized that the platform transformation driven by AI and accelerated computing has fueled business growth, and the company's robust cash-generating capability enables it to return capital to shareholders while investing in advancing its technological transformation.
This massive share buyback comes as NVIDIA's stock has shown signs of a slowdown in its strong upward momentum. As more investors begin to question the sustainability of the AI boom, this record-breaking capital return not only directly addresses market concerns but also underscores management's strong confidence in the monetization potential of its core business.
Setting a new record for U.S. corporate return on capital
NVIDIA's $150 billion authorization this time has broken the previous record of $110 billion, set by Apple in 2024 as the largest share buyback by a U.S. company. According to Bloomberg, when Apple announced this buyback, the iPhone maker ranked among the top five companies with the largest buyback authorizations in the United States.
Typically, a large-scale share buyback authorization indicates that the company's management believes its stock is undervalued, but this often also correlates with growth slowdowns faced by large, mature enterprises. For example, when Apple set a record for share repurchases, its iPhone business was experiencing slowing growth, relying primarily on its dominant position in the smartphone market to generate profits.
However, NVIDIA's trajectory stands in stark contrast. The chipmaker's sales are still surging, with its revenue expected to grow by about 90% this year. This indicates that, even as NVIDIA implements substantial shareholder returns, its fundamentals remain in a phase of rapid expansion.
AI infrastructure investment continues to enjoy robust demand.
The surge in NVIDIA's profits is primarily due to the tech industry's continued massive investment in AI infrastructure. According to Goldman Sachs, global spending on AI this year will exceed $1 trillion.
As the computational backbone powering large language models such as ChatGPT, Claude, and Gemini, NVIDIA's chip products remain in high demand. In the fierce AI race, numerous companies—including OpenAI, Anthropic, and SpaceX—are among its key customers. Even Google, which has developed its own proprietary AI chip series, is a major purchaser of NVIDIA products for its cloud computing division.
Strong cash flow underpins long-term valuation.
The better-than-expected financial results have provided strong support for NVIDIA's massive share buyback. According to consensus estimates from Visible Alpha, a division of S&P Global, NVIDIA generated nearly $100 billion in free cash flow in the most recent fiscal year ending January this year. This figure is expected to more than double by fiscal year 2028, reaching $329 billion.
In terms of net profit, according to Visible Alpha's forecast, NVIDIA's net profit for the current fiscal year will double to $245 billion and further rise to $387 billion in the next fiscal year ending January 2028.
In the secondary market, since OpenAI launched ChatGPT at the end of 2022, NVIDIA's stock has accumulated a gain of over 1,200%. However, by 2026, the stock's remarkable rally had begun to slow, with year-to-date gains hovering around 20%. Against a backdrop of diverging views on the sustainability of the AI boom, robust earnings expectations and strong cash flow have remained key pillars supporting NVIDIA's investor confidence.
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