$50B: NVIDIA announces one of S&P 500's biggest share buybacks
What's the story
NVIDIA, a leading player in the chip industry, has announced a stock buyback worth $50 billion.
The decision was made public alongside the company's fiscal second-quarter earnings report, which exceeded Wall Street predictions.
This move follows a successful first half of FY25 for NVIDIA, during which it returned $15.4 billion to its shareholders through stock repurchases and cash dividends.
Buyback boost
NVIDIA's stock buyback: A significant increase from last year
The newly announced buyback is a substantial increase from the previous year's $25 billion, making it one of the largest in the S&P 500.
This move comes after NVIDIA reported having $7.5 billion remaining under its share repurchase plan, at the end of its fiscal second quarter.
Historically, companies have seen their stock prices rise following announcements of share buyback plans.
Market response
Stock performance and Q2 financial results
Despite the announcement of a stock buyback and strong financial results, NVIDIA's shares fell by 4% in extended trading.
The company's share has more than doubled so far this year, making it the highest-performing member of the S&P 500 in 2024.
NVIDIA reported that its second-quarter sales climbed 122% year-over-year to $30.04 billion, while net income jumped 168% YoY to $16.6 billion.
Investor expectations
Future projections and market reaction
NVIDIA projects approximately $32.5 billion in third-quarter sales, surpassing analysts' estimates of around $31.7 billion. Some experts think that the firm is doing so well that it is becoming harder to impress investors.