Nvidia has authorized an additional $150 billion for its share buyback program, driving its total remaining authorization to hundreds of billions of dollars as CEO Jensen Huang calls the company a rare growth-value stock amid compressed market multiples for fiscal 2028.
Nvidia Expands Buyback Program as P/E Ratios Hit Ten-Year Lows
When Nvidia announced its massive capital return plan on Monday, the world’s most valuable company was trading at its cheapest price-to-earnings ratio in a decade. The chipmaker’s P/E ratio for fiscal 2028, which begins in February, sits at a modest 14.5. That figure trails nearly all major megacap peers except for Micron and sits well below Nvidia’s five-year average P/E of 62.9.
The compressed valuation contrasts sharply with the company’s historic profitability. Boosted by insatiable demand for graphics processing units powering the artificial intelligence boom, Nvidia’s stock has climbed 23% this year to lead the Nasdaq. Yet share prices have failed to keep pace with soaring earnings. Wall Street analysts project net income to reach nearly $385 billion in fiscal 2028—a 60% jump from the prior year and a fivefold increase over a three-year span.
To bridge that valuation gap, Nvidia’s board authorized an additional $150 billion for its share repurchase program. The fresh authorization comes on top of an $80 billion plan announced in May, during which the firm also raised its quarterly cash dividend to 25 cents per share from a single penny.
Wall Street and Executive Perspectives on Valuation
Karan Ramchandani, managing director at Post Oak Group, described the buyback as a definitive corporate statement.
Ramchandani noted that earnings are scaling up faster than the share price, making buybacks the most prudent investment the company can make in the coming year. CEO Jensen Huang echoed that sentiment during financial media appearances, telling investors that the company’s financial generation will support aggressive shareholder returns.
“We’re going to generate a lot of cash in the coming years,” Huang said on CNBC’s “Squawk Box” on Monday. “As we generate more cash, we’d like to be able to return it back to shareholders.”
Jensen Huang, CEO
Not all market observers view the compressed multiple with immediate comfort. Gene Munster, managing partner at Deepwater Asset Management, explained that investors remain anxious about whether extraordinary growth rates can persist indefinitely after a monstrous multi-year surge.
“It’s just really hard for investors to get comfortable that that’s going to continue. That downward slope of growth rate, that’s the reason why it trades at that compressed multiple.”
Gene Munster, managing partner at Deepwater Asset Management
Comparing Nvidia Against Megacap Peers and Chip Rivals
Nvidia’s fiscal 2028 valuation leaves it trailing several megacap technology peers and established data center competitors. The chipmaker’s forward multiple sits behind Apple at 35.5, Alphabet at 22.6, Microsoft at 21.7, and Amazon at 23.2. Direct rivals in the AI silicon space also command higher P/E multiples, including Broadcom at 18.2, Advanced Micro Devices at 38.2, and Intel at 54.7.
Despite those compressed figures, none of Nvidia’s competitors match its projected growth trajectory. The company told investors in August that it anticipates 70% sales growth in fiscal 2028, outpacing Wall Street’s previous forecasts by hundreds of billions of dollars. Huang recently argued at a Goldman Sachs conference that traditional financial categories fail to capture the company’s unique market position.
“We are the world’s first and only growth value stock. People are trying to figure out which one we are. We are both.”
Jensen Huang, CEO
Projected Earnings Impact and Share Count Reductions
The financial mechanics of the expanded buyback could meaningfully alter per-share metrics. Analysts at UBS noted in a client note that the stepped-up share repurchases could add 8 cents per share to calendar year 2027 earnings, which the firm estimates at $17.16.
Company disclosures indicate that Nvidia's total share count could drop by 4% if management executes the entirety of its current repurchase authorization. Ben Reitzes, an analyst at Melius Research who maintains a buy recommendation on the stock, emphasized that aggressive buybacks provide a direct mechanism to solve valuation friction.
Software and Hardware Rollouts Accompany Capital Return Plans
Alongside the capital return announcement on Monday, Nvidia rolled out new software and hardware solutions designed specifically to control AI agents. The stock responded with an intraday high before closing up.
With management signaling strong revenue visibility through early 2028 and committing half of its anticipated free cash flow to repurchases and buybacks, investors will monitor upcoming quarterly disclosures to track whether actual cash generation matches the historic profit projections set for the chipmaker.