Nvidia approves additional $150 billion share buyback — CNBC

Nvidia has approved an additional $150 billion for its share repurchase program. This supplements the $80 billion plan announced in May, when the company also raised its quarterly dividend from 1 cent to 25 cents per share, CNBC reports.

Stock valuation

Nvidia's forward price-to-earnings ratio for fiscal 2028, which will begin in February, is 14.5. This is lower than the figures for Apple at 35.5, Alphabet at 22.6, Microsoft at 21.7, and Amazon at 23.2, calculated for the same period. Among Nvidia's main competitors in the data center chip segment, higher ratios are held by Broadcom at 18.2, AMD at 38.2, and Intel at 54.7.

Nvidia's average P/E ratio over the past five years was 62.9. The company's shares have risen 23% since the beginning of the year and outperformed the Nasdaq, but, according to CNBC, the pace of the share-price increase does not match the expected growth in earnings.

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Profit forecasts

Analysts on average forecast that Nvidia's net profit in fiscal 2028 will reach nearly $385 billion. This is 60% more than a year earlier and more than five times higher than three years ago. In August, the company told investors that it expects sales to grow by 70% in fiscal 2028.

Nvidia CEO Jensen Huang has said that the company expects to generate significant amounts of cash in the coming years and return it to shareholders. Nvidia has also said it intends to allocate about half of its free cash flow to share repurchases. If the company uses the full amount of its current authorization, its number of outstanding shares could decrease by 4%.

Market reaction

On Monday, Nvidia shares rose nearly 2%. On the same day, the company unveiled new software and hardware solutions for managing AI agents. UBS analysts believe that increased share repurchases could add 8 cents to Nvidia's earnings per share for calendar year 2027; their estimate for this metric is $17.16.