AI giant Nvidia announces $150billion share buyback. Here's what it means for shareholders
&imwidth=600&imheight=450&format=webp&quality=medium "AI giant Nvidia announces $150billion share buyback. Here's what it means for shareholders")
Nvidia announces a record $150 billion share buyback Photograph: (AFP)
Nvidia announces a record $150 billion share buyback, taking its total authorisation to $235 billion amid strong AI growth and rising scrutiny
Nvidia has announced a record $150 billion share buyback, taking its total repurchase authorisation to $235 billion as the chipmaker continues to benefit from strong demand for artificial intelligence infrastructure. The latest authorisation represents the largest increase in a US corporate share-buyback program, surpassing Apple's $110 billion buyback authorisation announced in 2024.
Nvidia expands share buyback program
A share buyback is when a company uses its own cash to purchase shares from the market. By reducing the number of shares in circulation, buybacks can increase earnings per share while returning capital to existing shareholders. NVIDIA plans to deploy the newly authorized funds through fiscal 2028. CEO Jensen Huang said the company's strong cash generation will allow it to invest in new technologies while also returning capital to shareholders. The announcement comes as NVIDIA continues to generate substantial cash from its expanding AI business. The company has also been using its financial resources to invest in AI companies and provide financing to some of its major customers.
Nvidia's valuation and AI growth
The buyback comes as NVIDIA's valuation has declined despite strong earnings growth. Its forward price-to-earnings multiple has fallen significantly from earlier levels, while NVIDIA's shares have gained more than 20 per cent this year. The company also forecasts around 70 per cent revenue growth for fiscal 2028, reinforcing its outlook amid questions over how long the current AI investment boom can continue.
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Nvidia launches AI security platform
Alongside the buyback announcement, NVIDIA has unveiled an open-source AI security platform designed to prevent autonomous AI agents from carrying out unauthorised actions. The platform, called Open Agent Safety, includes Open Shell, which limits the access and authority of AI agents, and Sentry, a security layer designed to monitor their activities. The launch comes amid growing attention to the security risks associated with autonomous AI systems, particularly as AI agents become capable of interacting with external networks, applications and other digital systems.
AI spending faces growing scrutiny
NVIDIA's latest capital-allocation strategy comes as investors continue to assess the sustainability of heavy spending on AI infrastructure. The company is using its strong cash flows to fund investments, support its customers and return capital to shareholders through buybacks. At the same time, questions remain around the pace and durability of AI demand as technology companies continue committing billions of dollars to data centres, advanced chips and other AI infrastructure.
