Nvidia Just Authorized Another $150 Billion in Buybacks. What Do Shareholders Get?

Nvidia has found another use for its money: buying Nvidia.

On Monday, September 28, the company announced an additional $150 billion in share-repurchase authorization, bringing its remaining authorization to $235 billion. It expects to execute that remaining program through fiscal 2028, according to its announcement distributed through GlobeNewswire. NDTV Profit also reported the increase.

That’s a substantial vote of confidence from management. It’s also a capital-allocation decision, which sounds considerably less exciting and happens to be the part shareholders should care about.

I like a buyback when it leaves continuing shareholders with a bigger interest in a business at a sensible cost. The headline dollar amount alone doesn’t tell us whether that’s happening.

The board approved a budget. The purchases come later.

The extra $150 billion gives Nvidia more room to repurchase shares. It doesn’t mean the company bought that much stock Monday morning, and shareholders aren’t about to receive their portion as a cash payment.

In a buyback, the company pays investors who sell. Investors who keep their shares can end up owning a larger percentage of the company as outstanding shares decline. Whether they’re better off depends partly on what the company paid and what else it could have done with that cash.

Nvidia already has a substantial repurchase history. Its quarterly filing for the period ended July 26 reports $39.8 billion spent repurchasing 203 million shares during the first half of fiscal 2027. The filing also says purchases depend on market conditions, operating requirements and other investment opportunities, and the program can be suspended.

The fiscal-year labels matter here. Those first-half fiscal 2027 purchases occurred in calendar 2026. Corporate calendars apparently needed their own small obstacle course.

A smaller share count can make the earnings look bigger

Here’s a simplified hypothetical, not a forecast for Nvidia.

Imagine a company earns $100 million a year and has 100 million shares. That’s $1 of earnings per share. It spends $100 million buying back stock at $10 a share, retiring 10 million shares.

With 90 million shares remaining and the same $100 million in profit, earnings per share become about $1.11. That’s an 11.1% increase, even though total profit hasn’t grown.

Now change the purchase price to $20. The same budget buys only 5 million shares. With 95 million remaining, earnings per share reach about $1.05, an increase of roughly 5.3%.

Both examples assume the repurchase happens before the measurement period, no new shares are issued, and earnings stay unchanged. Real results also reflect timing, lost interest on the cash spent, financing costs if borrowed money is used, and applicable taxes and fees.

You can see why I’d rather know the purchase price than applaud the size of the budget. Spending more to retire each share reduces how much ownership the same dollars can buy.

Watch the shares coming in, too

Companies can repurchase stock while issuing shares through employee compensation. Nvidia’s filing describes restricted stock units and other equity awards, along with its employee stock purchase plan.

There’s nothing automatically suspicious about paying employees partly in stock. It does mean gross repurchases won’t necessarily equal the reduction in shares outstanding.

Suppose our hypothetical company buys back 10 million shares but issues 4 million new ones. The net reduction is 6 million. Counting only the repurchases would overstate the increase in each remaining shareholder’s ownership.

For actual reported earnings per share, check the weighted-average diluted share count as well. It incorporates timing and potentially dilutive securities, so it can differ from the shares outstanding on the last day of the quarter.

Give the announcement three lines in your notes

At the next earnings release, record cash spent on repurchases, the change in shares outstanding, and diluted earnings per share alongside total net income. Our guide to reading an earnings report explains where per-share results fit into the broader business picture.

That comparison helps separate growth in the business from the effect of dividing its profit among fewer shares. Both can benefit owners, but they deserve separate entries in your reasoning.

My preference is straightforward: judge management’s repurchases with the same price discipline you’d apply to your own investments. A company doesn’t get a bargain simply because it’s buying itself.

For Nvidia, the next useful evidence will be the purchases and share counts reported in subsequent filings. Monday gave us the expanded budget.

Educational analysis, not personalized investment advice. Investing involves the risk of loss.

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