Nvidia Surpasses Apple in Buybacks and Dividends

Nvidia's recent announcement of a $150 billion increase to its share repurchase program has brought its total to $235 billion, surpassing Apple's $100 billion additional authorization. This move is in line with my prediction made mid-September that Nvidia would overtake Apple in buybacks and dividends.

The AI-driven growth of both companies benefits from their positioning along the AI value chain. While hyperscalers like Alphabet, Microsoft, and Amazon drain their free cash flow (FCF) as they heavily invest in AI, Nvidia and Apple are well-positioned to convert AI-driven revenue into FCF, fueling buybacks and dividends.

Nvidia's capital return program is growing faster than Apple's, with the company returning 60% of its first-half fiscal 2027 FCF to shareholders. The company intends to increase this percentage going forward if it rakes in more FCF than needed.