Updated version 4 - Driven by the surge in artificial intelligence, Nvidia expands its stock buyback to a record 150 billions dollars.

Updated stock price data in paragraph 2 and added details in paragraph 7.

Anhata Rooprai

Reuters, September 28 - NVIDIA NVDA.O has raised its stock buyback authorization to a record $150 billion, exceeding Apple’s AAPL.O $110 billion buyback plan approved in 2024 (link). The chip giant's stock is currently trading near its lowest valuation in more than a decade.

Shares of Santa Clara, California-based NVIDIA rose over 3% in early trading. As of last Friday’s close, the stock was up more than 20% year-to-date.

This additional authorization brings NVIDIA's remaining stock buyback amount to $235 billion. The company expects to use these funds before fiscal year 2028, as surging demand for AI training and inference is fueling cash flow growth.

According to data compiled by LSEG, NVIDIA shares are now trading at roughly 16.5 times 12-month forward earnings, the lowest P/E ratio since January 2015 and well below the 15-year average of 30 times. Some analysts see this as a sign that profit growth expectations are slowing.

The announcement comes at a time when stock buybacks (link) are slowing down, with repurchase volume dropping by about 50% from July to September 23.

"Our cash flow gives us the ability to invest in technologies driving this transformation and return capital to shareholders," CEO Jensen Huang said in a statement.

Based on LSEG data, NVIDIA’s $150 billion buyback increase exceeds the market value of about 84% of S&P 500-listed companies.

Last month, NVIDIA projected that revenue would grow about 70% by fiscal year 2028 (link), reassuring investors who questioned how long the AI spending boom could last after several years of explosive growth.

The company has also been investing in AI startups and cloud service providers, prompting some investors to question whether such investments are indirectly supporting demand for its own chips.

At the end of the July quarter, NVIDIA held $22.44 billion in cash and cash equivalents.

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