Nvidia boosts buyback plan by record $150B amid AI competition
by@Reuters
Summary
Nvidia has announced a record $150 billion increase to its share buyback authorization, boosting its total buyback capacity to $235 billion, which is expected to be deployed through fiscal 2028. This move comes as the company faces intensified competition in the AI chip market, with concerns among investors about the sustainability of its growth following a significant spending boom. Despite these challenges, Nvidia's robust cash generation allows it to continue investing in technology while returning capital to shareholders. Recently, Nvidia projected about 70% revenue growth for fiscal 2028, aiming to reassure investors about the ongoing demand for its hardware in the rapidly evolving AI infrastructure landscape.
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Analysis
Apple: Apple is a major technology company known for its consumer electronics and software ecosystem. The news references Apple's $110 billion share buyback approval from 2024, which Nvidia's new authorization surpasses, highlighting Nvidia's use of repurchases to support its stock amid moderating growth expectations. Nvidia: Nvidia is a Santa Clara, California-based technology company that develops graphics processing units and other hardware essential for artificial intelligence applications. In the news, Nvidia announced a record $150 billion increase to its share buyback authorization as competition in the AI chip market pressures its stock performance relative to peers. The company cited its strong cash generation from demand for its processors as enabling both continued business investment and capital returns to shareholders. Jacob Bourne: Jacob Bourne is an analyst at Emarketer focused on technology and market trends. He commented on the Nvidia news that the AI buildout will not continue at its current pace indefinitely but that the company is signaling confidence in sustained demand for its hardware and services. Ben Barringer: Ben Barringer is head of technology research at Quilter Cheviot. In the context of the Nvidia announcement, he noted that the buyback mirrors Apple's strategy of using share repurchases to support the stock as growth slows and valuation multiples face pressure. Growth Outlook: Nvidia recently provided a growth outlook that includes substantial revenue expansion expectations for fiscal 2028, aiming to reassure investors about the longevity of AI spending trends. AI Infrastructure Race: Technology companies are racing to build AI infrastructure while investors question whether the massive spending boom that elevated Nvidia can be sustained long term. Shareholder Returns Strategy: Nvidia is using its cash generation capacity to invest heavily in advancing technologies while also returning capital to shareholders through buybacks.
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