Nvidia’s Aggressive Buyback Expansion is a Flashing Green Light
Jensen Huang says AI tokens are now productive and profitable, and NVIDIA keeps converting that claim into cash at a pace that makes its nearest rivals look like bystanders. Here is why one investor keeps clicking buy every time the…
My NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) position keeps growing, and the latest buyback expansion gave me one more reason to click buy again. When a company producing this much cash commits that much of it to reducing my share count, I want to own more of it.
Why the Buy Button Keeps Pulling Me Back
NVIDIA offers the full AI stack: compute, networking, and the CUDA software that ties them together. The company turns that platform into cash and sends a growing share of it back to owners like me. The CEO, Jensen Huang, summed up the demand side: “AI has reached its inflection point. It’s doing useful work. Its tokens are productive and profitable. Now, compute is revenue.”
Buyback Firepower That Keeps Growing
In May 2026, the board approved an additional $80.0 billion repurchase authorization with no expiration, on top of $38.5 billion left under the prior one. By the end of Q2 FY27, roughly $99.0 billion remained. In that quarter alone, NVIDIA returned a record $26 billion: $20 billion in buybacks and $6 billion in dividends after raising the quarterly payout from $0.01 to $0.25 per share. Management said, “Relative to our plan to return 50% or more of free cash flow, we have returned 60% on a year-to-date basis,” and added that it intends to “increase and return excess free cash flow net of strategic uses.”
Growth Pays for Every Dollar Returned
Q2 FY27 revenue reached $96.22 billion, up 105.8% year over year. Non-GAAP EPS of $2.22 topped the $2.09 consensus, the fifth consecutive beat. Data Center revenue rose 117% to $89.02 billion. Guidance calls for $108.0 billion, plus or minus 2%, in Q3, and management expects roughly 70% revenue growth in fiscal 2028 while supply-constrained.
Valuation and Balance Sheet Back the Thesis
I pay about 46 times earnings for a business with a 101.49% ROE, 92.21% ROIC, debt-to-equity of 0.0726, and interest coverage of 503.42x. That balance sheet lets buybacks continue through any soft patch.
Why My Money Skips AMD and Intel
Advanced Micro Devices (NASDAQ:AMD) trades near 228 times earnings, posted a 56% non-GAAP gross margin against NVIDIA’s 75.0%, pays no dividend, and reported no repurchases in its first two quarters of fiscal 2026. Intel (NASDAQ:INTC) booked a $11.0 billion GAAP net loss in Q2, pays no dividend, and guided to roughly 42.0% non-GAAP gross margin. Intel now partners with NVIDIA on custom NVLink products, so I get that upside through my NVIDIA shares.
China and Capital Commitments: Risks I Track Closely
Export restrictions keep China Data Center compute out of guidance, and NVIDIA carries $279 billion in supply commitments plus guarantees limited at $108.5 billion. Days sales outstanding rose to 60 days from 45 days, and gross margin should bottom at 71% to 72% in Q4 on memory costs. Those commitments could hurt should AI spending stall. The guidance already assumes zero China revenue and demand exceeds supply, which supports my thesis. Huang said, “Our demand is much higher than that.”
What Keeps My Buy Button Active
Vera Rubin lifts NVIDIA’s opportunity to $40 billion per gigawatt from $25 billion with Blackwell. All of that compute still has to be powered, cooled, and networked by somebody, which is why we rounded up seven suppliers behind the AI expansion in a free report. Shares slipped 4.48% over the past week as new AI announcements failed to re-energize investors. I welcome that. Every decline lets my dollars and NVIDIA’s $99.0 billion authorization buy more of the same business, and I plan to keep buying alongside the company.
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Alex Sirois is a financial writer with experience spanning both retail and institutional investing. He has written for InvestorPlace and held roles at BNY Mellon and Bernstein, giving him a perspective that bridges Main Street portfolios and Wall Street analysis.
Alex holds an MBA from George Washington University and has built his career across multiple industries, including e-commerce, education, and translation — a breadth of experience that informs how he breaks down complex financial topics for everyday investors. His writing is conversational, actionable, and grounded in long-term, buy-and-hold investing principles.
At 247 Wall St., Alex focuses on delivering analysis that is both accessible and useful, with a clear emphasis on helping readers make more informed decisions with their money.
