▲ Nvidia
Nvidia, the leading artificial intelligence (AI) semiconductor stock, is undertaking the largest share buyback in U.S. corporate history by approving an additional 150 billion dollars (approx. 204 trillion KRW) in share repurchases.
Nvidia announced on the 28th (local time) that its board of directors approved adding 150 billion dollars to its existing share buyback program.
With this addition, Nvidia's total approved share buyback scale has increased to 235 billion dollars (approx. 320 trillion KRW).
The scale of this additional approval alone surpasses the 110 billion dollar share buyback announced by Apple in May 2024.
This comes just four months after Nvidia's board increased its share buyback limit by 80 billion dollars, followed by another substantial increase on this day.
Nvidia explained that it plans to execute the share buyback program sequentially through fiscal year 2028.
Jensen Huang, CEO of Nvidia, said, "Nvidia's growth is being driven by a once-in-a-generation platform shift to AI and accelerated computing," adding, "Based on our strong cash generation, we can invest in related technologies while returning capital to shareholders."
The market views that Nvidia increased its share buybacks as it became undervalued, with its 12-month forward price-to-earnings ratio (PER) lingering at just 16.5 times.
This means the current stock price is about 16.5 times the expected net profit it will earn over the next year.
Nvidia's average PER over the past 15 years was around 30 times.
Accordingly, it is interpreted that the company carried out the share buybacks to defend its stock price and enhance shareholder value.
Jacob Bourne, an analyst at market research firm eMarketer, told Reuters, "While the AI infrastructure-building frenzy will not continue at its current pace forever, Nvidia has sent a signal that demand for its hardware and services will persist."
Following the news of the massive share buyback, Nvidia's shares surged by over 3.6% at one point during intraday trading, though they later pared some of those gains to close the regular session up 1.68% from the previous trading day at 228.86 dollars.
Nvidia, which dominates the market for AI graphics processing units (GPUs) and data center semiconductors, currently boasts a market capitalization exceeding 5.5 trillion dollars, holding the top spot as the most valuable company.
(Photo: AP, Yonhap News)
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