Nvidia announces $50 billion stock buyback

Nvidia said Wednesday that its board of directors has approved a $50 billion stock buyback.

The computer chip giant announced the share repurchase as part of its fiscal second-quarter earnings, in which it reported earnings and guidance that surpassed Wall Street expectations.

Nvidia returned $15.4 billion to shareholders in share repurposes and cash dividends as part of the company’s first half of its fiscal 2025. The company said it had $7.5 billion remaining under its share repurchase plan, as of the end of its fiscal second quarter.

Last year, Nvidia announced a $25 billion share buyback as part of its fiscal second-quarter results.

Companies often experience a boom to their stock price after revealing stock buyback plans.

In May, for instance, Apple announced a $110 billion stock buyback as part of its fiscal second-quarter results that showed overall sales fell 4% year over year and iPhone sales dropped 10% year over year. However, the iPhone maker’s shares rose 7% in after-hours trading, likely because Apple’s share buyback was the biggest in corporate history.

With Nvidia’s shares dropping 4% in extended trading despite reporting solid financial results and announcing a stock buyback, some experts believe the company has been doing so well that it is getting harder to impress investors.

Second-quarter sales rose 122% year over year to $30.04 billion, while net income jumped 168% year over year to $16.6 billion, Nvidia said.

The company said it projects roughly $32.5 billion in third-quarter sales, topping analysts’ estimates of $31.7 billion.

— CNBC’s Kif Leswing contributed reporting.