Nvidia is already the world’s most valuable company. Now, it has approved the largest share buyback in stock market history.
The chip giant said Monday it has authorized an expansion of its existing share buyback plan by $150 billion, increasing the value of approved repurchases to $235 billion. Apple previously held the record for the largest-ever buyback, authorizing $110 billion in 2024.
The AI Boom
“I think we’re going through the largest infrastructure build-out in human history, and we have the benefit of being a very central part of that,” Nvidia CEO Jensen Huang said in an interview with CNBC shortly after the announcement.
“We’re generating a lot of cash, we’re going to generate a lot of cash in the coming years. And you know, every single year, as we generate more cash, I’d like to be able to return it back to the shareholders,” he added.
Last week, Nvidia raised its quarterly dividend from a penny per share to 25 cents, implying a yearly yield of 0.4% at its current $230 stock price. The company reported a total of $99 billion in cash and other liquid investments as of July 26, up from about $63 billion six months ago. Nvidia said it expects to finish the buyback by the 2028 financial year.
Why Buybacks Matter
When a company repurchases stock, it returns capital to shareholders by using some of its cash to buy back its own shares. Buybacks reduce the amount of outstanding shares, which can push up a company’s stock price. They can also help offset the issuance of shares as employee compensation.
Legendary investor Warren Buffett has said that buybacks only make sense when a stock is trading at a discount to its intrinsic value. In that scenario, management is buying it for less than its worth, making it a good use of the company’s cash. Thus, buybacks typically send a bullish signal to the market.
Nvidia stock traded about 2% higher by late morning ET on Monday. It was up 21% for the year as of Friday’s close, and nearly 1,000% over the past five years.
The AI Safety Platform
The buyback plan was announced just hours after Nvidia launched its Open Agent Safety Platform, a system designed to stop AI agents from going rogue.
“Several frontier labs have recently reported versions of the same story: AI agents broke out of the evaluation environments that were meant to contain them and reached systems they never should have been allowed to,” Nvidia wrote in its announcement. “We believe we need to increase the pace of AI safety research and engineering.”
The platform was launched with over 100 partners, including AI leaders such as Anthropic and SpaceX, as well as Microsoft, Oracle, and several major US banks.
The Bottom Line
Nvidia has approved the largest share buyback in stock market history, expanding its repurchase program to $235 billion. CEO Jensen Huang said the company is generating significant cash from the AI infrastructure boom. The buyback dwarfs Apple’s previous record of $110 billion. Nvidia also launched a new AI safety platform with over 100 partners.
My Opinion
Nvidia is sitting on $99 billion in cash. It just approved a $235 billion buyback — the largest in history. And it is spending that money to buy back its own stock at a valuation that assumes the AI boom will continue forever.
There is nothing illegal about this. Buybacks are a legitimate way to return capital to shareholders. But there is something unsettling about a company this central to the global economy deciding that the best use of its cash is to inflate its own share price. Nvidia’s chips are the backbone of the AI revolution. It is the most important technology company in the world right now. And it is telling the market that it cannot think of anything better to do with $235 billion than buy its own stock.
Jensen Huang says the AI infrastructure build-out is “the largest in human history.” Maybe he is right. But if he is, why not invest that cash in building more chips, more data centers, more capacity? Why not lower prices? Why not pay workers more? The answer is simple: buybacks boost the stock price. And the stock price is what Wall Street rewards.
