Nvidia Will Buy Back $235 Billion of Its Stock by January 2028. Does That Make the Stock a Buy?
Nvidia has a good problem on its hands: what to do with all this excess capital.
Overview
Few companies have been bigger beneficiaries of the massive artificial intelligence data center build-out than Nvidia (NASDAQ: NVDA). The company's graphics processing units (GPUs) are essential infrastructure for AI training and inference. That's led its data center sales to soar from $11 billion in fiscal 2022 to a $356 billion run rate as of its most recent quarter. As Nvidia is a relatively capital-light business, that's resulted in a tremendous amount of free cash flow.
Nvidia is already returning a lot of that cash to shareholders through dividends and buybacks. But the board just authorized the largest share repurchase plan in history, adding $150 billion to Nvidia's remaining authorization. Management now has $235 billion in total buyback authorizations, and it plans to deploy the full amount before the end of January 2028.
Details
The question for investors is: Does that make the stock a buy?
Source
Originally published at www.fool.com.