Nvidia Stock Drops. Strong Earnings Weren't Enough to Lift Shares.

Nvidia left its quarterly dividend unchanged at a penny a share. But it did something for income-minded investors: The company announced a $50 billion share repurchase.

At recent prices, that will buy back some 420 million shares, or just under 2% of the shares outstanding.

It immediately ranks as the third largest buyback in the S&P 500. Apple has repurchased some $91 billion worth of stock over the past 12 months, according to FactSet. Alphabet has repurchased $63 billion. Meta Platforms has repurchased about $41 billion worth of its stock.

The $50 billion buyback sum alone would rank as the 187th most valuable company in the S&P 500. It’s a lot of money.

Nvidia can afford it. Wall Street projects a free cash flow of about $74 billion over the coming 12 months.

A buyback for Nvidia isn’t new. But the amount is going up. The board authorized a $25 billion repurchase in August 2023 and the company bought back about $15.4 billion in the first half of fiscal year 2025. (Nvidia’s fiscal year ends in January.)

Investors will focus on Nvidia's sales guidance and AI technology. But they shouldn’t completely forget about capital return. It is an important part of stock returns and, in the case of Nvidia, it is going in the right direction.