On Wednesday, Nvidia revealed that its board of directors has approved a massive $50 billion stock buyback program. This announcement coincided with the release of the company’s fiscal second-quarter earnings report, which surpassed Wall Street’s expectations in both revenue and future projections.
Shareholder Returns in Fiscal Year 2025
In the first half of fiscal year 2025, Nvidia returned $15.4 billion to shareholders through share repurchases and cash dividends. By the end of the fiscal second quarter, there was $7.5 billion remaining under its existing share repurchase plan. This new buyback follows last year’s significant $25 billion buyback, also disclosed during the fiscal second-quarter earnings report.
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Historical Impact of Stock Buybacks
Historically, companies often experience a boost in their stock prices following the announcement of stock buyback plans. For instance, in May, Apple announced a $110 billion stock buyback along with its fiscal second-quarter results, despite reporting a 4% decrease in overall sales and a 10% decline in iPhone sales year-over-year. Apple’s shares surged 7% in after-hours trading, likely due to the scale of the buyback, which was the largest in corporate history.
Market Reaction and Future Projections
Despite Nvidia’s robust financial results and the buyback announcement, its shares fell by 4% in extended trading. Some experts believe Nvidia’s consistent outperformance has set such high expectations that it is becoming increasingly challenging to impress investors.
Financial Performance Overview
For the second quarter, Nvidia reported a 122% year-over-year increase in sales, reaching $30.04 billion, and a 168% rise in net income, totaling $16.6 billion. Looking forward, the company estimates approximately $32.5 billion in sales for the third quarter, surpassing analysts’ forecasts of $31.7 billion.
My name is Jay Skrantz, and I’ve been a freelance writer for 10 years, concentrating largely on investment brokerage, mutual fund investing, and financial analysis topics. As a reporter, I’ve written extensively for a wide variety of sites and publications like SeekingAlpha, MoneyShow, and MotleyFool. I’ve also done substantial freelance work for a number of financial publications, including MarketWatch, CIO Magazine, and TheStreet.
