Nvidia just greenlit the biggest buyback in stock market history

Nvidia CEO Jensen Huang. Bloomberg/Getty Images Nvidia has approved the biggest share buyback program in stock market history. The chip giant said Monday it has authorized an increase of $150 billion to its current share repurchases. Nvidia has become the world's most valuable company as it helps fuel the AI boom. Nvidia is already the world's most valuable company. Now, it has approved the largest share buyback in history. The tech giant, whose chips are powering much of the AI boom, said on Monday that it has authorized an expansion of its existing share buyback plan by $150 billion, increasing the value of approved repurchases to $235 billion. Apple previously held the record for the largest-ever buyback, authorizing $110 billion in 2024. "I think we're going through the largest infrastructure build-out in human history, and we have the benefit of being a very central part of that," Nvidia CEO Jensen Huang said in an interview with CNBC shortly after the announcement. "We're generating a lot of cash, we're going to generate a lot of cash in the coming years. And you know, every single year, as we generate more cash, I'd like to be able to return it back to the shareholders," he added. Last week, Nvidia raised its quarterly dividend from a penny per share to 25 cents, implying a yearly yield of 0.4% at its current $230 stock price. The company reported a total of $99 billion in cash and other liquid investments such as stocks and bonds as of July 26, up from about $63 billion six months ago. Nvidia said it expects to finish the buyback by the 2028 financial year. When a company repurchases stock, it returns capital to shareholders by using some of its cash to buy back its own shares. Buybacks reduce the amount of outstanding shares, which can push up a company's stock price. They can also help offset the issuance of shares as employee compensation. Legendary investor Warren Buffett has said that buybacks only make sense when a stock is trading at a discount to its intrinsic value. In that scenario, management is buying it for less than its worth, making it a good use of the company's cash. Thus, buybacks typically send a bullish signal to the market, as they show a company is willing to bet money that its stock is undervalued and likely to rise over time. Nvidia stock traded about 2% higher by late morning ET on Monday. It was up 21% for the year as of Friday's close, and nearly 1,000% over the past five years. The buyback plan was announced just hours after Nvidia launched its Open Agent Safety Platform, a system designed to stop AI agents from going rogue. "Several frontier labs have recently reported versions of the same story: AI agents broke out of the evaluation environments that were meant to contain them and reached systems they never should have been allowed to," Nvidia wrote in its announcement. "We believe we need to increase the pace of AI safety research and engineering," the announcement added. Concerns around AI safety have been in sharp focus in recent weeks amid growing fears of an AI-triggered doomsday scenario. The platform was launched with over 100 partners, including AI leaders such as Anthropic and SpaceX, as well as Microsoft, Oracle, and several major US banks. Read the original article on Business Insider