Chipmaker Nvidia (NVDA) has announced that it is increasing its share repurchase program by $150 billion U.S.
The company whose microchips and processors run artificial intelligence (A.I.) models and applications said the increase brings its stock buyback program total to $235 billion U.S.
In a statement, Nvidia also said that its $150 billion U.S. hike represents the biggest share repurchase authorization increase in history.
The company expects to complete its stock buybacks by the end of 2028. Stock buybacks lower the available number of shares and increase the ownership of existing stockholders.
“Nvidia’s growth is being driven by a once-in-a-generation platform shift to AI and accelerated computing,” said CEO Jensen Huang in the company’s statement.
The increased share repurchase is the latest effort by Nvidia to improve its shareholder returns.
Earlier this year, the company increased its quarterly dividend payment by 2,400% to $0.25 U.S. per share from $0.01 U.S. previously.
The raise in its share repurchase program comes with Nvidia’s stock trading at its cheapest valuation in nearly a decade.
Despite its sales and profit doubling year-over-year, Nvidia’s stock is up only 19% this year and currently trades at 28 times forward earnings estimates.
That’s cheap compared to competing A.I. chipmakers such as Advanced Micro Devices (AMD), whose stock has gained 182% year-to-date and trades at 162 times future earnings estimates.
Nvidia CEO Huang recently said in a media interview that he believes the company and its stock are “misunderstood” by investors.
NVDA stock is trading at $225.07 U.S. per share on Sept. 28.
