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Total approved share buyback amount 320 trillion won... Exceeds Apple's 'previous largest' scale
Nvidia, the leading artificial intelligence (AI) semiconductor stock, is embarking on the largest share buyback in U.S. corporate history by additionally approving a $150 billion (approximately 204 trillion won) share buyback.
Nvidia announced on the 28th (local time) that its board of directors approved adding $150 billion to its existing share buyback program.
As a result, Nvidia's total approved share buyback amount has increased to $235 billion (approximately 320 trillion won).
The scale of this additional approval alone surpasses the $110 billion share buyback announced by Apple in May 2024.
Nvidia's board of directors had increased the share buyback limit by $80 billion just four months ago, and then significantly increased it again today.
Nvidia explained that it plans to execute the share buyback program sequentially until fiscal year 2028.
Jensen Huang, Nvidia CEO, said, "Nvidia's growth is driven by a once-in-a-generation platform transition to AI and accelerated computing," adding, "Based on strong cash generation, we can invest in related technologies and return capital to shareholders."
The market believes that Nvidia increased its share buyback due to an undervalued situation where its 12-month forward price-to-earnings ratio (PER) was only 16.5 times.
This means that the current stock price is 16.5 times the expected net profit it will earn over the next year. Nvidia's average PER over the past 15 years was around 30 times.
Accordingly, the share buyback was carried out to defend the stock price and enhance shareholder value.
Jacob Bourne, an analyst at market research firm eMarketer, told Reuters, "While the AI infrastructure build-out craze won't continue at the same pace forever, Nvidia is signaling that demand for its hardware and services will persist."
Upon the news of the large-scale share buyback, Nvidia's stock price surged by more than 3.6% at one point during trading, but later gave back some of its gains, closing the regular session at $228.86, up 1.68% from the previous day's closing price.
Nvidia, which dominates the market for AI graphics processing units (GPUs) and data center semiconductors, currently holds the position of the largest company with a market capitalization exceeding $5.5 trillion.
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