Nvidia expands share buyback plan as $150 billion authorization boosts capital return

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Nvidia expands buyback plan

Highlights

Nvidia's board approved an additional $150 billion in share repurchases, bringing total buyback authorization to $235 billion through fiscal 2028.
Nvidia shares rose nearly 3% Monday, adding to a 24% year-to-date gain amid fiscal 2027 projected earnings growth of 94%.
Wall Street expects Nvidia to generate roughly $440 billion in free cash flow over the next six unreported quarters, supporting continued large-scale buybacks and AI investments.

Buyback expansion and execution timeline

As reported by CNBC, Nvidia's board has approved an additional $150 billion in share repurchases, which the company says is the largest buyback increase on record and one it expects to complete through fiscal 2028.

The new authorization comes as Nvidia moves through the third quarter of fiscal 2027. Shares rose nearly 3% on Monday, extending the stock's year-to-date gain to about 24%, while the company continues to post strong profit growth tied to global AI infrastructure spending.

Nvidia had already been increasing buybacks before the latest move. In May, the board authorized another $80 billion in repurchases with no expiration date, and the company bought back a combined $39 billion of stock in the first two quarters of fiscal 2027, nearly matching the total for all of fiscal 2026, according to FactSet. Nvidia repurchased about $34 billion in fiscal 2025.

The company has committed to return at least 50% of free cash flow to shareholders through buybacks and dividends. In May, it also raised its quarterly dividend to 25 cents a share from 1 cent, although the stock's yield remains below 0.5%, keeping the focus on repurchases rather than income generation.

Market impact and shareholder returns

Nvidia's expanded buyback comes amid a gap between its operating performance and relative stock performance within the semiconductor sector. Adjusted earnings per share have more than doubled in back-to-back quarters, and FactSet estimates project fiscal 2027 earnings growth of 94%, accelerating from 60% growth in the prior year.

Even so, Nvidia ranks among the weaker performers this year in the iShares Semiconductor ETF, while the broader fund is up 86% including Monday's intraday move. Buybacks reduce the number of shares outstanding, which increases the ownership stake of remaining investors and can lift earnings per share if other factors remain unchanged.

Chief Executive Jensen Huang said on CNBC's "Squawk Box" that Nvidia expects to generate substantial cash in the coming years and wants to return that cash to shareholders as it is produced. Wall Street expects Nvidia to generate roughly $440 billion in free cash flow over its next six unreported quarters, according to FactSet data, a period that overlaps with the planned completion of the $235 billion repurchase program.

Nvidia is also using its balance sheet to support the wider AI ecosystem through investments and financing arrangements with customers and other companies building AI infrastructure. That strategy has drawn scrutiny over circular financing risks, but the company still appears positioned to expand buybacks while maintaining spending needed to defend its leadership in AI chips.

Meta’s Muse AI launch and Enterprise Platform rollout were previously covered by our publication, focusing on how the company is turning heavy AI infrastructure spending into tangible products for both consumers and businesses. We noted that this shift helped improve investor sentiment toward Meta’s capex plans and reinforced demand for advanced chips across the U.S. semiconductor supply chain, benefiting suppliers such as AMD.

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