Nvidia has announced a $50 billion stock buyback, following approval by its board of directors. The announcement was made alongside the company’s fiscal second-quarter earnings report, which exceeded Wall Street expectations. Despite this, Nvidia’s shares fell by 4% in extended trading. The company’s sales surged by 122% year-over-year to $30.04 billion, and net income increased by 168% to $16.6 billion. Nvidia also projected third-quarter sales of approximately $32.5 billion, surpassing analysts’ estimates of $31.7 billion.
As part of its first half of fiscal 2025, Nvidia returned $15.4 billion to shareholders through share repurchases and cash dividends. The company still had $7.5 billion remaining under its existing share repurchase plan by the end of its fiscal second quarter. This new buyback follows a $25 billion share repurchase announced last year.
Stock buybacks can often lead to an increase in a company’s stock price, as seen in May when Apple’s announcement of a $110 billion stock buyback led to a 7% rise in after-hours trading despite declining sales. However, Nvidia’s recent strong financial performance and substantial buyback plan were not enough to prevent a dip in its stock price. Some experts suggest that Nvidia’s consistent outperformance has raised investor expectations, making it more challenging to achieve a positive market reaction.
Featured Image courtesy of The New Arab
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