Nvidia stock rose in early trading after the AI hardware giant announced Monday morning the largest stock buyback in history and a new platform for AI security guardrails.
The $150 billion stock repurchase plan represents the largest increase in stock repurchase authorizations in history and brings the company’s total repurchase authorization to $235 billion.
This move is a clear signal to the market that Nvidia management views the stock as cheap. With a price-to-earnings ratio of around 30, Nvidia is trading at its lowest valuation in around four years. That’s even as analysts predict earnings per share will nearly double this fiscal year, according to estimates compiled by Bloomberg.
Jensen “has so much liquidity and cash flow that even after making these investments, he still has a lot of money left,” Gil Luria, head of technology research at DA Davidson, told Yahoo Finance in a phone interview. “He knows his stocks are cheap.”
When asked about Nvidia’s new security platform, Luria added: “Jensen is the big conductor, and when he sees a need, he fills it. He tries to grow the whole market, because he knows that if the whole market grows, Nvidia is a winner.”
Nvidia’s total market capitalization is more than $5.5 trillion, making it worth $500 billion more than the second-largest company, Apple (AAPL).
Nvidia is expected to announce its third quarter results on November 17.
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