Nvidia is expanding its stock buyback program to $235 billion, the largest repurchase authorization in corporate history, even as two of its biggest customers, Alphabet and Meta, halt their own buybacks to pour cash into artificial intelligence infrastructure.
The chipmaker disclosed the expanded authorization alongside its quarterly earnings. The move signals that Nvidia sees its own shares as undervalued and has the cash flow to reward investors while demand for its AI processors continues to outpace supply.
The contrast with Alphabet and Meta is stark. Both companies said they are suspending buybacks to redirect capital toward data centers, chips, and AI model development. Meta has told investors to expect significantly higher capital expenditures in 2025. Alphabet has made similar commitments.
"The market is rewarding companies that invest in AI infrastructure, and it's punishing those that don't," said Daniel Morgan, a portfolio manager at Synovus Trust, in comments to MarketWatch. "Nvidia is in the unusual position of being both the supplier and the beneficiary."
Nvidia's buyback dwarfs anything seen before in the technology sector. Apple, long the king of shareholder returns, has authorized roughly $100 billion in repurchases in a single year. Nvidia's new authorization is more than double that figure.
The timing matters. Nvidia's stock has surged more than 180% over the past year, making it one of the most valuable companies in the world. A buyback at this scale reduces the number of shares outstanding, boosts earnings per share, and signals management's confidence in future cash flows.
But the strategy cuts against what Alphabet and Meta are doing. Those companies are choosing to build rather than buy back. Meta has said its AI spending will exceed $60 billion this year. Alphabet has committed to similar levels.
That spending flows directly to Nvidia, which supplies the GPUs that power most large-scale AI training. The dynamic creates a feedback loop: Meta and Alphabet spend on AI, Nvidia profits, and Nvidia returns that profit to shareholders through buybacks.
Analysts say the divergence reflects different stages of the AI cycle. Nvidia is harvesting profits now. Alphabet and Meta are still planting. Whether that bet pays off depends on whether AI investments eventually generate returns that justify the spending.
For now, Nvidia's balance sheet gives it room to do both. The company reported data center revenue that beat expectations, and its gross margins remain above 70%. That cash generation funds the buyback without straining operations.
Investors reacted positively to the announcement. Nvidia shares rose in after-hours trading. Alphabet and Meta shares have lagged behind Nvidia this year as investors weigh the cost of their AI ambitions against near-term profits.
The buyback also raises questions about whether Nvidia is signaling that its growth is peaking. Companies often expand repurchases when they see limited opportunities to reinvest capital at high returns. Nvidia executives rejected that interpretation, pointing to continued demand.
