Can NVIDIA's $150B Repurchase Plan Enhance Shareholder Value?
NVIDIA Corporation’s NVDA latest decision to add $150 billion to its share repurchase authorization highlights the company’s strong cash generation and its willingness to return capital to investors. The increase brings the remaining authorization to $235 billion, with NVIDIA planning to execute the program through fiscal 2028. The increase in share repurchase authorization is the largest ever in the company’s history.
The scale of the program is supported by NVIDIA’s rapidly growing business. In the second quarter of fiscal 2027, revenues jumped 106% year over year to $96.2 billion, while Data Center revenues surged 117% to $89 billion. GAAP and non-GAAP gross margins were both 75%. In the second quarter, the company generated operating cash flow of $24.08 billion and free cash flow of $21.34 billion. These results show NVDA is generating substantial cash while continuing to invest heavily in AI infrastructure.
NVIDIA returned approximately $26 billion to shareholders during the second quarter through share repurchases and dividends. It repurchased $19.7 billion of stock and paid $6 billion in dividends during the quarter. In the first half of fiscal 2027, it generated operating and free cash flows of $74.42 billion and $69.9 billion, respectively. This provides a strong financial base for continued capital returns.
The buyback can also enhance shareholder value by reducing the number of outstanding shares, potentially supporting earnings per share over time. With AI demand accelerating and third-quarter revenues expected to grow 12% sequentially and reach $108 billion, the expanded authorization gives NVIDIA considerable flexibility to return excess cash while funding future growth.
How Do NVIDIA’s Peers Fare in Shareholder Return Policy?
Broadcom Inc. AVGO and Texas Instruments Incorporated TXN are leveraging strong AI-driven cash generation to strengthen shareholder returns.
Broadcom has built a solid capital return strategy backed by robust cash flows. In the first three quarters of fiscal 2026, the company generated $31.9 billion in free cash flow, representing roughly 45% of revenues. Broadcom has consistently returned excess cash through dividends and share repurchases while continuing to invest in AI technologies. In the first nine months of fiscal 2026, it returned $18.3 billion to shareholders through share buybacks and dividend payments.
Texas Instruments is also benefiting from rising AI demand. The company generated free cash flow of $4.1 billion in the first half of 2026. During the period, it repurchased stocks worth $185 million and paid $2.6 billion in dividends. Supported by growth in industrial, automotive and data center markets, Texas Instruments appears well-positioned to generate higher cash returns for shareholders in the coming years.
NVIDIA’s Price Performance, Valuation and Estimates
Shares of NVIDIA have risen around 23.8% year to date, outperforming the Zacks Computer and Technology sector’s gain of 22.4%.
NVIDIA YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, NVDA trades at a forward price-to-earnings ratio of 17.34, below the sector’s average of 19.95.
NVIDIA Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NVIDIA’s fiscal 2027 and 2028 earnings implies a year-over-year increase of approximately 93.9% and 65.8%, respectively. Estimates for fiscal 2027 and 2028 have been revised upward over the past 30 days.
Image Source: Zacks Investment Research
NVIDIA currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Texas Instruments Incorporated (TXN) : Free Stock Analysis Report
Broadcom Inc. (AVGO) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
