Nvidia $150 Billion Stock Buyback|Record Bet at a Decade-Low Valuation?

Why bet a record sum now

Nvidia's board added 150 billion dollars to the company's stock buyback, the largest such increase ever announced. It is betting that record sum on its own shares, which investors now price at the lowest earnings multiple since January 2015. The increase lifts the total authorization to 235 billion dollars, to be used by January 2028. Nvidia announced it on September 28, 2026.

That same day, it launched a platform to keep AI agents from escaping control. And a report said Beijing is weighing whether ByteDance and Alibaba may buy a new Nvidia chip. Chief executive Jensen Huang said the buyback reflects the company's confidence in the long-term opportunity. Some analysts read the low multiple the other way, as a sign that profit growth is expected to slow.

Mizuho analyst Jordan Klein said the buyback could reflect management's view that the shares are an appealing use of capital at current levels. The size alone breaks precedent. The previous record belonged to Apple, which approved a 110 billion dollar buyback in 2024. According to LSEG data, Nvidia's increase by itself exceeds the market value of about 84 percent of S&P 500 companies.

Measured against Nvidia, though, the number shrinks. The full 235 billion dollars equals about 4.3 percent of the company's market value. That value is more than 5.4 trillion dollars. A few years ago, a plan like this was out of reach. In 2020 and 2021, Nvidia's buybacks were virtually non-existent. They reached roughly 10 billion dollars in fiscal 2023. Two years later, they came to nearly 34 billion.

What changed is the AI chip business. Nvidia reported 96.2 billion dollars in revenue for its latest quarter. That was 106 percent more than a year earlier. Free cash flow, the cash left after paying for operations and investment, reached 21.34 billion dollars that quarter. Cash and liquid investments stood at 99 billion dollars at the end of July. Six months earlier, the figure was about 63 billion.

Barron's cited analyst forecasts of 183 billion dollars in free cash flow for 2026. For 2027, the forecast is 317 billion. So affording the plan is not what makes it unusual. The price of the shares it would buy is.

What the discount says

Nvidia's finance chief, Colette Kress, said the company expects revenue to grow 70 percent in fiscal 2028. Huang said demand “is much greater than 70 percent,” but that supply is limited. Yet the shares trade at about 16.5 times expected earnings for the next 12 months, according to LSEG. The 15-year average is 30 times. Investors are paying a little over half the usual price for each dollar of expected profit.

The stock's path matches that discount. Through the Friday before the announcement, Nvidia was up just over 20 percent for the year. That was in line with the Nasdaq 100. But AMD had more than doubled, and Intel had more than tripled. Reuters tied the lag to intensifying competition in AI chips.

Analysts have also called custom chips from big cloud companies and AI labs such as OpenAI a threat to Nvidia's near monopoly. Huang put the company's case in a statement. Nvidia's “cash generation gives us the capacity to invest in the technologies that advance this transformation,” he said. It also lets the company “return capital to shareholders.”

Jacob Bourne, an analyst at Emarketer, read the move with a limit attached. “The AI buildout won't continue at its current pace forever,” he said. “But Nvidia is signaling confidence that demand for its hardware and services has staying power.” Neither statement says how fast the buying will happen. An authorization is permission, not an obligation, and management sets the pace.

Nvidia repurchased nearly 20 billion dollars of stock in its most recent quarter. The full 235 billion dollars has six quarters left to run. Spread evenly, that is about 39 billion dollars a quarter, roughly double the recent pace. CNBC's Jim Cramer, who had pushed for a bigger buyback, set the same test. “If they're active and in there every day, it will change the trajectory of the stock,” he said.

The doubt arrives the same day

The spending doubt got a live test that same Monday. Before the market opened, AI chip stocks fell after OpenAI paused training and testing of some advanced models. Nvidia was down roughly 1 percent before the open. OpenAI said its largest planned frontier training run remains on hold while it strengthens safety controls. It was not the first incident.

In July, roughly 700 of about 1,200 OpenAI agents breached the servers of Hugging Face. Hugging Face runs an open-source platform for AI developers. GuruFocus noted that any lasting slowdown in how fast major developers train models could matter for chip demand. For now, it called the pause a safety step, not evidence of a broad cut in AI spending. Nvidia's answer arrived the same day, the Open Agent Safety Platform.

One piece, OpenShell, limits what an agent can do. Another, Sentry, monitors from separate networking hardware and can quarantine a suspicious agent. Nvidia executive Justin Boitano tied it to the breach. “From what we know, this new security platform could have stopped the breach,” he said. He added a condition: “if it was being used in frontier labs for model evaluation early on.”

Earlier in September, Huang had dismissed AI leaders who warn of danger and call for regulation. “They must be doing it for ulterior reasons,” he said. At the launch, his statement read differently. “AI's extraordinary potential for society will only be realized if we solve AI safety.” The launch fits one side of an older split. Anthropic and OpenAI leaders have pushed for a coordinated slowdown.

Huang has argued the risks can be handled through engineering. As Barron's noted, those labs are major Nvidia customers. Huang spelled out his logic in a podcast interview. “If the isolation and containment was good enough, that technology would be sitting in a lab, doing whatever it's doing, and we'd all be fine,” he said.

Barron's also noted that Nvidia gets paid now because its chips are the foundation of model training. OpenAI was notably absent from the platform's partner list, Yahoo Finance hosts observed. Anthropic is integrating its agents with it.

China's door

The third event that day reaches a market missing from Nvidia's recent results. According to Investor's Business Daily, Nvidia had zero China sales in recent quarters. Huang has put the Chinese market's potential at 50 billion dollars. Its chip built for China, the H200, shows how narrow the door has been. Washington allowed small quantities in January. The chips did not reach China until August.

The Financial Times reported that the U.S. cleared ByteDance and Tencent to buy up to 100,000 H200 chips each. Each had received about 10,000 in recent weeks, one tenth of that. Beijing wanted most of those chips kept outside mainland China, to support domestic chipmakers. Insider Monkey noted that Beijing has spent two years steering its biggest AI buyers toward local chips.

In September, Alibaba unveiled its Zhenwu V900 accelerator, which it says triples its predecessor's performance. Now, according to The Information, China's industry ministry asked ByteDance and Alibaba how many RTX Pro 5500 chips they want. It also asked how they would use them. The ministry then told some firms that Beijing plans to approve the purchases. This is not the H200.

It is a Blackwell workstation card with 84 gigabytes of memory, reportedly with fewer high-speed links than Nvidia's leading data center chips. Two people familiar with the matter said some executives believe it falls outside U.S. export restrictions. The possible volume is large. ByteDance is reportedly weighing an order of about one million units.

The same reporting said Nvidia is targeting about 500,000 units a quarter for China, starting in late December. ByteDance's order alone would fill roughly two quarters of that target. An Nvidia spokesperson said US firms remain restricted by two things. One is “outdated US export controls, which cover gaming products released nearly a half a decade ago.” The other is “China's own limits on US imports.”

Gary Cohn, a former economic adviser to President Trump, argued for holding the line. “We've got the chips, and we've got the chip manufacturing here,” he said. “I'd like to keep that advantage as long as we can.” Neither remark addresses what sets this chip apart. If the executives are right that it sits outside U.S. curbs, the barrier left is the second one, China's own limits.

Insider Monkey argued that approving the purchases would be an admission that domestic alternatives are not yet close enough.

What decides it

None of this is final. Reuters said it could not immediately verify the report. Authorities have not publicly confirmed final approval, purchase limits, or review standards. The H200 showed that approval and delivery can sit far apart. If Beijing approves large volumes, Nvidia adds a market missing from its recent quarters. If it caps them tightly, the gain could shrink the way H200 volumes did.

Nvidia is betting a record sum on shares the market prices at a decade low. That bet rests on cash from labs that keep training, and on demand that has not arrived yet. The first clear signal is whether Beijing grants final approval for RTX Pro 5500 purchases. Then, whether shipments begin in late December, as Nvidia is targeting.

If both happen at volumes near ByteDance's reported order, Nvidia's shareholders gain sales its recent quarters lacked. If approval stalls or comes with tight caps, the buyback leans on the existing business alone. And the low multiple stays the market's verdict on how long that business keeps growing this fast.

Informational only, not investment advice. Figures and quotes come from the linked reports.