Nvidia Boosts Buyback Plan to $235 Billion Backed by Strong Cash Flow

Nvidia has significantly expanded its share repurchase program, adding $150 billion to its authorization, bringing the total remaining capacity to $235 billion. The company expects to execute this buyback through fiscal 2028, supported by strong free cash flow projections.

The company's free cash flow has seen remarkable growth, rising from $27.02 billion in fiscal 2024 to an estimated $96.68 billion in fiscal 2026. This rapid increase underscores the financial strength behind the buyback program, with the authorization amounting to approximately 2.4 times the fiscal 2026 free cash flow.

Nvidia's CEO, Jensen Huang, hinted at the buyback during a September 10 appearance at Goldman Sachs Communacopia, stating, "I’m here to sell some NVIDIA stock." Eighteen days later, the board approved the $150 billion increase, reinforcing the company's commitment to returning value to shareholders.

The buyback's success hinges on Nvidia's ability to maintain or exceed its projected free cash flow. The next filing will reveal the pace of repurchases, with fiscal 2027 free cash flow above $96.68 billion indicating continued growth. Conversely, flat or lower cash flow could signal challenges in sustaining the program.

Additionally, Nvidia disclosed $279 billion in supply and capacity commitments as of July 26, primarily related to memory procurement. The CFO noted "extreme pricing conditions in memory" as a potential margin headwind, adding a layer of complexity to the buyback strategy.