Nvidia (NVDA) Approves $150 Billion Share Buyback... "Breaks Apple (AAPL) Record"

▲ Nvidia (NVDA), US Stocks/AI-generated image

Nvidia (NVDA) has approved a $150 billion share buyback plan, setting a record for the largest increase in US corporate history. This super-large shareholder return policy, which surpasses Apple's (AAPL) previous record, is evaluated to have allayed market concerns about the sustainability of artificial intelligence (AI) infrastructure investments and led to a stock price rebound.

According to the US financial media outlet Barron's on September 28 (local time), Nvidia's board of directors approved an additional share buyback of $150 billion. This figure significantly exceeds Apple's previous all-time high of $110 billion recorded in 2024. When combined with the remaining share buyback limit, Nvidia's total potential share buyback capacity amounts to $235 billion, which the company plans to complete by the end of fiscal year 2028.

Jensen Huang, Nvidia's CEO, explained that this measure is an expression of confidence in AI infrastructure expansion. CEO Huang stated, "Our strong cash generation provides us with the capacity to simultaneously invest in advanced technologies that will drive the AI transition and return capital to shareholders." He added, "We will generate enormous cash over the next few years, and as cash increases each year, we intend to actively return it to shareholders." Nvidia has previously promised to return 50% of its free cash flow (FCF) to shareholders through a combination of dividends and share buybacks.

According to market research firm FactSet, Nvidia is expected to generate a massive free cash flow of approximately $183 billion this year. Earlier this year, the company increased its quarterly dividend from 1 cent to 25 cents per share, raising its annual dividend payout to approximately $24 billion. With the addition of the largest-ever share buyback, Nvidia has established a system to defend its earnings per share (EPS) by directly reducing the number of outstanding shares in the market with its immense financial power.

Barron's diagnosed that Nvidia is following Apple's past trajectory of shareholder returns. Just as Apple overcame concerns about a slowdown in the hardware cycle and had its corporate value re-evaluated through large-scale share buybacks and expansion of its services business, Nvidia is also breaking through controversies surrounding over-investment in the AI ecosystem with massive cash returns. As of July 26, Nvidia holds equity investments worth $99 billion and investment commitments totaling $25 billion, expanding its influence beyond semiconductor sales to the entire ecosystem.

Immediately after the announcement, Nvidia's stock price rebounded immediately in pre-market trading, overcoming a weakness of over 1% and expanding its gains to 1.8%. Market attention is now focused on whether Nvidia, having thrown an unprecedented $150 billion shareholder return gambit, can completely shake off AI skepticism and secure additional upward momentum beyond a market capitalization of $5.4 trillion.

[Article Key Summary]

-Nvidia has approved a record $150 billion share buyback, surpassing Apple's $110 billion.

-The total potential buyback capacity has expanded to $235 billion, with an estimated free cash flow of approximately $183 billion this year.

-Nvidia's stock price rebounded by 1.8% in pre-market trading immediately after the announcement, allaying concerns about AI ecosystem investment.

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