Nvidia surpasses Apple with the largest buyback plan in history

Nvidia announced an increase in its share buyback program by $150 billion, raising the remaining amount to $235 billion. This is the largest addition in history, surpassing Apple's previous record of $110 billion in 2024. Investors reacted positively, with the company's stock rising about 2% to around $230, reflecting a market cap of approximately $5.5 trillion.

Nvidia announced an increase in its share buyback program by $150 billion, raising the remaining amount to $235 billion. This is the largest addition to a buyback program in history, surpassing Apple's previous record of $110 billion in 2024. Investors reacted positively to the announcement, and the company's stock rose about 2% to around $230, giving Nvidia a market cap of approximately $5.5 trillion. Nvidia plans to execute these buybacks by the end of fiscal year 2028, ending in January 2028. To meet this target, the company will need to spend more than $40 billion per quarter—a pace double its current rate. CEO Jensen Huang linked the move directly to the company's cash generation ability. Nvidia's free cash flow for the first half of fiscal 2027 surged 77% to $69.9 billion. History shows such moves tend to benefit investors. An examination of Apple's major buyback programs between 2018 and 2025, along with Nvidia's own buyback increases since 2023, shows that stocks rose within 12 months of the announcement. In eight out of nine cases, the stocks even outperformed the S&P 500. However, these gains appear to stem mainly from strong business performance and cash generation, not the buyback itself. Nvidia's current valuation may make the buyback particularly worthwhile. The stock trades at a P/E ratio of about 15 on expected earnings for fiscal 2028, while Apple, for example, trades at a P/E of about 36 on expected earnings for 2027. This means every dollar Nvidia invests in buying its shares buys twice the expected earnings compared to Apple.