Nvidia Announces $50 Billion Stock Buyback

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Nvidia announced on Wednesday that its board of directors has approved a substantial $50 billion stock buyback. This repurchase initiative was revealed alongside the computer chip giant’s fiscal second-quarter earnings report, which exceeded Wall Street’s expectations in both earnings and guidance.

Shareholder Returns and Previous Buyback

In the first half of its fiscal year 2025, Nvidia returned $15.4 billion to its shareholders through share repurchases and cash dividends. By the end of the fiscal second quarter, the company had $7.5 billion left under its current share repurchase plan. This announcement follows last year’s $25 billion share buyback, also disclosed during the fiscal second-quarter earnings.

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Historical Impact of Stock Buybacks

Historically, companies often see a surge in their stock prices after unveiling stock buyback plans. For example, in May, Apple announced a $110 billion stock buyback alongside its fiscal second-quarter results, despite reporting a 4% decrease in overall sales and a 10% drop in iPhone sales year over year. However, Apple’s shares surged 7% in after-hours trading, likely due to the scale of the buyback, which was the largest in corporate history.

Market Reaction and Financial Performance

Despite Nvidia’s solid financial results and the announcement of the buyback, its shares fell 4% in extended trading. Some experts suggest that Nvidia’s consistent outperformance has set a high bar, making it increasingly difficult to impress investors.

Financial Performance Overview

For the second quarter, Nvidia reported a 122% year-over-year increase in sales, reaching $30.04 billion, and a 168% jump in net income, totaling $16.6 billion. Looking ahead, the company forecasts approximately $32.5 billion in sales for the third quarter, surpassing analysts’ expectations of $31.7 billion.