Nvidia Spent $26 Billion on Buybacks and Dividends in a Single Quarter. Its Board Is Betting Today's Profits Last 3 More Years.
Buybacks and dividends this big only pay off if today's profits hold. The board is betting they will.
Overview
Nvidia (NASDAQ:NVDA) returned approximately $26.0 billion to shareholders through share repurchases and cash dividends in its fiscal second quarter of 2027 (the period ended July 26). That's more than the $21.3 billion of free cash flow the artificial intelligence (AI) chip giant generated in the quarter, and nearly 10 times its capital spending for the period.
With guidance, management says what it expects from the coming quarter. With buybacks and dividends of this size, I think it shows how long it expects profits like today's to last. After all, repurchasing stock only works out if the earnings behind the price hold up.
Image source: Nvidia.
Details
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Originally published at www.fool.com.