Nvidia Corp. today announced plans to spend an additional $150 billion on share buybacks through January 2028.

The move represents the largest-ever expansion of a stock repurchase program. Furthermore, Nvidia plans to boost its current dividend of 25 cent per share. The company didn’t specify the size or timing of the planned increase.

Nvidia says that the moves are motivated by two main factors. The first is its rapid revenue growth, while the other is the strong performance of its startup investment portfolio. The buybacks will provide another way for shareholders to benefit from its success in those areas.

“Our cash generation gives us the capacity to invest in the technologies that advance this transformation and return capital to shareholders,” Chief Executive Jensen Huang said in a statement. “This authorization reflects our confidence in the long-term opportunity ahead.”

Nvidia ended its fiscal second quarter with $22.44 billion in cash and cash equivalents. The company’s adjusted profit and revenue, in turn, more than doubled thanks to continued demand for its graphics cards. Chief Financial Officer Colette Kress told analysts that the chipmaker expects its sales to increase by an additional 70% in fiscal 2028. Wall Street was expecting 40%.

Nvidia’s revenue growth is partly fueled by its expanding product lineup. Five years ago, its data center portfolio consisted almost solely of graphics processing units. Today, the company supplies customers with not only GPUs but also central processing units, networking gear and a range of other products. 

Nvidia disclosed in a presentation today that it generates $40 billion in revenue for every gigawatt of data center capacity built by customers. That represents a fourfold increase from 2022. According to the company, its revenue per gigawatt will top $60 billion following the launch of its next-generation Feynman series of GPUs. The chip lineup is scheduled to debut in 2028.

The other reason Nvidia decided to boost its stock buybacks is the success of its investment portfolio. The company disclosed today that its portfolio comprises stakes in 13 public companies and 229 private startups. According to the presentation, Nvidia’s exits have provided a more than threefold return on investment.

The upcoming initial public offerings of Anthropic PBC and OpenAI Group PBC are set to deliver another windfall for the chipmaker.

Last November, Nvidia committed to investing $10 billion in Anthropic. The AI provider received a $183 billion valuation two months earlier. Anthropic is now reportedly gearing up to go public at a $2 trillion valuation.

OpenAI, for its part, raised $30 billion from Nvidia as part of a February deal that valued it at $730 billion. The ChatGPT developer is reportedly in the process of raising a new investment at a valuation of up to $1.5 billion. OpenAI’s IPO could push its shares even higher, further boosting Nvidia’s return.

Photo: Nvidia