Nvidia accelerated its stock buyback plans, its main means of shareholder compensation, well ahead of the dividend. Furthermore, the artificial intelligence (AI) chip giant has promised that it will continue this strategy, in parallel with the growth of its revenues and its expansion in activities related to this revolutionary technology.
Thus, in the first nine months of the year, the company returned more than 37 billion dollars (almost 32,100 million euros) to shareholders, between dividends and share buybacks, most of it through the latter formula. In its quarterly financial report, in fact, Nvidia indicates that it has allocated 36,271 million for the repurchase of securities between February and October, a historic figure for the company, 40% more than the same period last year, and 427% more than in the first nine months of 2023, when the amount was 6,874 million.
And the strategy will be maintained. “Of course we will continue to buy back shares, we will continue to do so,” Nvidia CEO Jensen Huang said in telephone conference with analysts and investors following the announcement of the third quarter accounts.
In this sense the company still has a large margin. Nvidia management specified that, at the end of the third quarter, the company still had $62.2 billion pending execution under the current stock repurchase authorization.
Furthermore, with this strategy, the chip giant has helped take care of the share price, even in a period of euphoria among investors over their interest in artificial intelligence.
In the third quarter alone, Nvidia allocated 12,456 million dollars, 13.2% more than the previous year, to buy back its own shares, a period in which, in fact, the shares reached the all-time high of 212 dollars, bringing the market capitalization above five trillion dollars. A figure never achieved by another company, and which consolidates the chip manufacturer as the most capitalized in the world, ahead of Microsoft, Apple and Alphabet.
Since the beginning of the year, Nvidia has appreciated by more than 40% on the stock market, reaching the price of $195 this Thursday, although the shares subsequently entered negative territory, dropping to around $180. From the annual low of 86 dollars, marked at the beginning of April, after the correction in the first part of the year, resulting from the emergence of the Chinese Deepseek, the stocks jumped by 120%.
Additionally, Nvidia allocated $243 million in cash dividends in the third quarter, virtually the same amount as in the same period a year earlier. In the first nine months of the year the amount stood at 732 million, 24% more.
The company also announced that it will pay its next quarterly dividend of $0.01 per share on December 26, the same amount as the previous year.
The move is part of the strong growth of Nvidia, which, in the third quarter, increased its revenues by 62%, to $57,006 million, above forecasts. The group launched a forecast to reach 65 billion in the current quarter, ruling out the possibility of a bubble, defending the massive implementation of artificial intelligence. Huang said it has visibility into customer spending of more than $500 billion on its advanced chips over the next 14 months and between $3 trillion and $4 trillion industry-wide on AI infrastructure through the end of the decade.
