Nvidia Authorizes a Record $150 Billion in Stock Buybacks. The Real Prize Is Where the Rest of Its Cash Is Going.

Nvidia‘s (NASDAQ: NVDA) Board of Directors authorized a $150 billon increase to its share repurchase program, bringing the total to $235 billion. The announcement was the largest single stock buyback authorization in U.S. corporate history.

For context, Toyota Motor — which sells more cars than any other manufacturer in the world — has a market cap of $223 billion.

Missed AI’s “Act 1”? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout. Continue »

Here’s why Nvidia’s buyback program is great news for investors, and why the bigger story is what Nvidia is doing with the rest of its cash.

High margin revenue growth fuels free cash flow

Nvidia’s free cash flow (FCF) has exploded in recent years due to its rapid revenue growth and high margins. Nvidia returned 60% of FCF to investors through buybacks and dividends in the first half of fiscal 2027, and has a long-term target of returning at least 50% of FCF.

NVDA Revenue (TTM) data by YCharts

Nvidia is converting around 75 cents of every dollar in sales into gross profit, 64 cents into bottom-line after-tax profit, and around 42 cents into FCF. Nvidia’s growth and high margins are partly due to insatiable demand for artificial intelligence (AI)…