Nvidia makes a statement with historic $150 billion buyback announcement

By Emily Bary and Britney Nguyen

The company intends to repurchase a large amount of shares through January 2028, reflecting its 'confidence in the long-term opportunity ahead'

Nvidia's Jensen Huang says the company can both invest in its business and return cash to shareholders.

Nvidia's stock rose nearly 2% on Monday after the chip giant delivered a historic buyback announcement.

The company said it is boosting its share-repurchase authorization by $150 billion. Since Nvidia (NVDA) already had a substantial amount remaining via its prior authorization, management now has $235 billion available through its buyback program.

Nvidia intends to execute on the remaining amount through fiscal 2028, which ends in January of that year.

Companies buy back stock as a way of returning cash to investors, and they often do so when executives think shares are undervalued. The process of repurchasing stock reduces the number of shares outstanding, thereby helping boost earnings per share.

"Our cash generation gives us the capacity to invest in the technologies that advance this transformation and return capital to shareholders," Nvidia CEO Jensen Huang said in a release. "This authorization reflects our confidence in the long-term opportunity ahead."

Nvidia's "cash flow is becoming the real flex" for the company, and the stock's momentum following the announcement shows "investors are starting to get the message," Matt Britzman, a senior equity analyst at Hargreaves Lansdown, said in emailed comments.

This is likely the largest buyback authorization in U.S. corporate history. Based on data from Birinyi Associates in May, Apple (AAPL) previously held the crown with a $110 billion announcement made in May 2024.

That Nvidia is generating enough free cash flow from AI infrastructure demand to both ramp up its spending to "unprecedented" levels and return cash to shareholders at significant scale tells investors that it "sees the current AI buildout as durable rather than a short-term spike," David Wagner, head of equity at Aptus Capital Advisors, told MarketWatch.

The announcement also sends an upbeat message about the artificial-intelligence trade "at a moment when AI bubble concerns have been resurfacing," Wagner said.

"The real signal isn't the buyback itself. It's what the scale of the commitment says about how much cash Nvidia expects to keep generating through 2028," Wagner said.

Still, there are caveats to Nvidia's buyback plan, including that "part of any tech buyback goes towards offsetting shares issued to employees rather than genuinely shrinking the share count," Kate Leaman, chief market analyst at AvaTrade, told MarketWatch.

In her view, the company's massive buyback plan is akin to a bet on itself. It's one that "may pay off if AI spending holds up, but if the big cloud companies slow their data-center investment, the cash flows funding this program could come under pressure," she said.

Separately, Nvidia announced on Monday the launch of an open software platform meant to bolster the security of AI agents, which are bots that can act autonomously on a user's behalf. The platform includes OpenShell, which is said to work with third-party services.

"Companies are giving AI agents more of their most important work, and they need to direct and verify what those agents do, especially in sensitive environments," Anthropic's chief commercial officer, Paul Smith, said in a release.

Paul Meeks, head of technology research at Freedom Capital Markets, told MarketWatch he is encouraged by the platform given that "AI development will slow, which would be really bad for this entire ecosystem" if users don't trust the technology.

-Emily Bary -Britney Nguyen

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09-28-26 1727ET