- NVIDIA’s record $150 billion share-repurchase authorization gives the AI chipmaker substantially more room to return capital to investors.
NVIDIA Corp. (NASDAQ: NVDA) has authorized an additional $150 billion for share repurchases, taking the company's remaining authorization to $235 billion through fiscal 2028. The board approved the increase on Sept. 28, marking the largest increase to NVIDIA’s buyback program in its history.
For shareholders, the announcement matters because repurchasing common stock can reduce the number of shares outstanding. When earnings are spread across fewer shares, earnings per share can increase, assuming the company's net income and other factors remain unchanged.
The new authorization itself does not represent $150 billion that has already been spent. It gives NVIDIA permission to repurchase shares up to that amount over time, with the company determining the pace of purchases.
The announcement came as NVIDIA's stock gained about 1.6% on Sept. 28, even as the broader US market declined. Reuters reported that shares continued to rise in early trading Tuesday as investors assessed the size of the new capital-return program.
NVIDIA Has Already Been Buying Back Shares Aggressively
The new authorization builds on a buyback program that has already expanded significantly this year. NVIDIA approved an additional $80 billion authorization in May. At the end of its fiscal second quarter, approximately $99 billion remained available under the then-existing program.
During that quarter, NVIDIA spent $19.7 billion on share repurchases and returned approximately $26 billion to shareholders through buybacks and dividends. That puts the new $150 billion authorization into a broader capital-return strategy rather than making it NVIDIA's first major buyback.
NVIDIA's cash generation provides the financial foundation for the program. During the second quarter, the company generated $24.1 billion in operating cash flow. As of July 26, NVIDIA held $22.4 billion in cash and cash equivalents, plus approximately $76.9 billion in marketable debt and equity securities.
The company is also continuing to spend heavily on its business. NVIDIA's latest results showed $96.2 billion in quarterly revenue, up 106% from a year earlier, while Data Center revenue reached $89 billion, an increase of 117%. GAAP net income was $59.7 billion, and GAAP gross margin was 75%.
That combination gives shareholders two potential channels for returns: the company can reinvest cash into expanding its AI business while also returning capital through repurchases and dividends. The quarterly dividend is currently $0.25 per share, with NVIDIA's next payment scheduled for Oct. 1 to shareholders of record as of Sept. 10.
The company's expanded $235 billion buyback authorization therefore represents another substantial increase in the amount of capital that can potentially be returned to common shareholders.
The Price NVIDIA Pays Will Shape the Buyback’s Effect
The size of the authorization is only one part of the shareholder equation. A company buying back shares at a relatively low valuation can retire more shares for the same amount of money than it would at a higher valuation. The number of shares actually retired will therefore depend on NVIDIA's execution.
For shareholders who continue to own their stock, a smaller share count can increase their proportional ownership of the company. It can also provide support for per-share financial measures when operating performance is unchanged. But a buyback does not guarantee a higher stock price, and the ultimate return still depends on the company's business performance and the valuation investors assign to its earnings.
NVIDIA is simultaneously facing a very large investment cycle. The company expects $108 billion of revenue in the fiscal third quarter, plus or minus 2%, and has said demand for AI infrastructure remains strong. Its next-generation Vera Rubin platform has entered full production, while the company continues expanding its Data Center product portfolio.
That makes the relationship between capital returns and AI growth particularly important. NVIDIA needs to generate enough cash from its core operations to support research and development, manufacturing commitments, new products, and other investments while carrying out the buyback.
There are also external risks. The company continues to face competition in AI accelerators, supply-chain dependencies, and restrictions affecting some international markets. NVIDIA specifically identifies competition, manufacturing and supply constraints, geopolitical developments and changes in customer demand among the factors that could affect its results.
For shareholders, the $150 billion increase therefore represents additional capital-return capacity rather than an immediate $150 billion distribution. The more important numbers to follow will be the amount NVIDIA actually spends on repurchases, the resulting reduction in shares outstanding, free cash flow, earnings growth, and the valuation at which those purchases occur.
NVIDIA's record authorization is a significant change in its capital-allocation plans, but its ultimate effect on shareholders will be visible over time through those measures rather than the authorization figure alone.