Nvidia Authorizes Record $150 Billion Stock Buyback
Nvidia has authorized a record $150 billion increase to its share repurchase program, bringing the total to $235 billion. This is the largest single stock buyback authorization in U.S. corporate history, surpassing Toyota Motor's market cap of $223 billion.
The company's high-margin revenue growth and free cash flow have enabled it to return 60% of its FCF to investors through buybacks and dividends in the first half of fiscal 2027. Nvidia aims to return at least 50% of its FCF long-term, with around $75 of every $100 in sales converting into gross profit, $64 into bottom-line after-tax profit, and $42 into FCF.
The company's growth is driven by insatiable demand for AI compute and a highly effective product development pipeline. Its new Vera Rubin platform delivers a 90% reduction in inference costs and a 75% reduction in the number of GPUs needed for training. Nvidia expects Rubin to account for 20% of data center revenue in Q3 2027, with 70% year-over-year revenue growth expected in fiscal 2028.
Nvidia's culture prioritizes organic growth over buybacks, and management remains confident in its roadmap to generate higher FCF as AI compute demand increases. The company is also innovating at the speed of light, condensing product launches to six months to keep cash flow coming and avoid taking its competitive moat for granted.