US chipmaker makes massive bet on its own stock as valuation multiples drop to a ten-year low despite strong cash generation.
Nvidia has expanded its share repurchase authorization by a record $150 billion, surpassing Apple’s $110 billion benchmark set in 2024. The Santa Clara-based chipmaker is deploying its substantial cash reserves to support its equity value as rising competition in the artificial intelligence sector weighs on its performance relative to industry rivals. Shares in Nvidia rose more than 2 per cent following the announcement, leaving the stock up just over 20 per cent year-to-date—tracking the Nasdaq 100 but lagging competitors AMD and Intel.
The additional authorization brings Nvidia’s total remaining buyback capacity to $235 billion, which the company expects to execute through fiscal 2028. While global enterprise spending on AI infrastructure faces scrutiny over its long-term sustainability, Nvidia finished its July quarter with $22.44 billion in cash and cash equivalents. Chief Executive Jensen Huang highlighted that the group’s robust cash generation provides the flexibility to continue funding technology development alongside returning capital to shareholders.
Nvidia’s shares are currently trading at approximately 16.5 times 12-month forward earnings—their lowest valuation multiple since January 2015 and well beneath their 15-year average of 30. Market analysts note that the strategy reflects a classic corporate playbook of using repurchases to support equity valuations as profit growth moderates, following a period in which the company forecast roughly 70 per cent revenue growth for fiscal 2028.
Jacob Bourne, analyst at Emarketer, noted: “The AI buildout won’t continue at its current pace forever, but Nvidia is signaling confidence that demand for its hardware and services has staying power. Its cash generation is currently strong enough that it believes it can continue investing heavily in the business while also returning capital to shareholders.”
