NVIDIA Launches Stock-Price Boost Effort with Record-Breaking Share Buyback

[Financial News] U.S. AI semiconductor company NVIDIA has announced what would be the largest share buyback in U.S. corporate history, seeking to lift its stock price despite improving earnings.
NVIDIA said on the 28th (local time) through its media website that its board had approved adding $150 billion to the existing share buyback program. The move brings the company's total authorized share buyback amount to $235 billion. The board had also increased the buyback limit by $80 billion four months earlier.
The newly approved buyback amount surpasses the $110 billion share repurchase Apple announced in May 2024. NVIDIA said it plans to carry out the share buyback program gradually through fiscal 2028, which runs from February 2027 to January 2028.
NVIDIA CEO Jensen Huang emphasized, "NVIDIA's growth is being driven by a once-in-a-generation platform shift toward AI and accelerated computing." He added, "Our strong cash-generation ability allows us to invest in these technologies while also returning capital to shareholders."
NVIDIA said in August that revenue for the second quarter of its current fiscal year, covering May through July, rose 106% from the same period a year earlier. In an interview on the 17th, Jensen Huang forecast that semiconductor sales next year would be double this year's.
However, NVIDIA's stock has recently remained largely flat, contrary to the company's outlook. The stock reached a year-to-date high of $236 in May, then declined before rebounding in July. It has since traded between $208 and $228 per share.
The market estimated NVIDIA's 12-month forward price-to-earnings ratio (PER) at about 16.5. The PER is calculated by dividing a company's share price by its net income; a higher PER indicates that the company's stock is more highly valued relative to its net income. NVIDIA's average PER over the past 15 years was about 30.
Jacob Bon, an analyst at U.S. market research firm eMarketer, said of NVIDIA's share buyback decision, "Although the boom in AI infrastructure buildout will not continue forever at its current pace, NVIDIA has sent a signal that demand for its hardware and services will remain strong."
NVIDIA's stock surged by roughly 3.6% or more at one point during the session after news of the buyback became public. It later gave up part of those gains, closing the regular session at $228.86, up 1.68% from the previous day's close.
 
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