Nvidia Bets $60 Billion on Itself With Record Buyback Plan

Nvidia, the chipmaker at the heart of the AI boom, is sending Wall Street a powerful signal: it believes its own stock is still undervalued. The company has authorized a share repurchase program worth up to $60 billion, one of the largest in history, even as its market value already hovers near $4.2 trillion.

The AI Craze and Nvidia’s Meteoric Rise

Over the past five years, Nvidia’s stock has soared more than 1,200%. That kind of growth is rare, even in the tech sector. Investors have piled in because Nvidia isn’t just making graphics chips anymore. It’s become the essential supplier for artificial intelligence data centers, designing the processors that power everything from ChatGPT to self-driving cars.

Revenue has followed the hype. The company has delivered quarters of double- and even triple-digit growth, with profit margins that remain among the best in tech. At the same time, Nvidia has expanded beyond chips into full AI systems, software, and cloud-based offerings. Customers building AI applications increasingly see Nvidia as a one-stop shop.

Why Nvidia Is Buying Its Own Stock

For shareholders, a buyback can be both a reassurance and a red flag. On the positive side, buybacks reduce the number of shares outstanding, which boosts earnings per share and often supports the stock price. More importantly, they tell investors that management is confident about the company’s future.

Nvidia isn’t new to this game. It returned $24 billion to shareholders in just the first half of 2025 through repurchases and dividends. With the latest $60 billion plan, plus the $14 billion still left from prior authorizations, the company is doubling down.

Other big names are making similar moves. Apple, Alphabet, and JPMorgan Chase have each announced multibillion-dollar buybacks this year. Combined, U.S. companies are on pace to repurchase $1 trillion in stock by August — the fastest rate ever recorded.

The Critics’ View

Not everyone cheers buybacks. Some investors argue that pouring money into stock repurchases can mask slowing growth. By reducing the number of shares, a company can make its earnings per share look better even if overall profit is flat.

Others say that money could be better spent on research, development, or expansion. For a tech leader like Nvidia, that’s a valid question: would $60 billion go further if it was invested in new chip factories, AI research, or acquisitions?

There’s also the risk of buying at the top. With Nvidia stock up more than 200% in the past two years, skeptics wonder if management is paying too high a price for its own shares.

Nvidia’s Cash Machine Keeps Running

But the company’s financials tell a different story. Nvidia generates enormous free cash flow — more than enough to fund R&D and still buy back stock.

• Blackwell architecture was launched last year, followed quickly by Blackwell Ultra this summer.

• The next-generation Rubin chips are expected in 2026, showing the company is sticking to its annual refresh cycle.

• Gross margins remain close to 70%, among the highest in the semiconductor industry.

That kind of momentum eases concerns that buybacks are coming at the expense of innovation. In fact, Nvidia’s growing cash hoard suggests it can do both — reinvest heavily in future growth while rewarding current shareholders.

The Bigger AI Picture

Why does this matter so much? Because Nvidia sits at the center of a once-in-a-generation shift in computing. The company estimates that AI data center spending could reach $4 trillion by the end of the decade.

If that prediction holds true, Nvidia could continue reaping outsized profits as its chips remain the default choice for AI developers. Even if competitors like AMD and Intel chip away at market share, the overall pie is growing so quickly that Nvidia may not feel much pressure.

For now, the $60 billion buyback looks more like a show of confidence than a financial trick. It signals that management believes Nvidia’s future earnings will justify today’s lofty valuation.

Market Reaction and What’s Next

The market didn’t immediately celebrate the news. Nvidia shares slipped 3.4% on the day of the announcement, closing at $174.09, partly dragged down by broader tech weakness. Trading volumes were high, with more than 243 million shares changing hands, well above the daily average.

Here’s where Nvidia stands today:

For long-term investors, the short-term dip may not matter much. Nvidia’s buyback could provide a cushion against volatility while its chips remain indispensable for AI’s next phase.