Nvidia ($NVDA) approves $80B buyback and 25x dividend hike on Q1 FY2027 beat

Nvidia's ($NVDA) board approved a new $80 billion stock repurchase program on May 21 and raised the quarterly dividend 25-fold to $0.25 per share from $0.01. With $39 billion remaining under an existing buyback authorization, Nvidia now commands approximately $119 billion in total share repurchase capacity — among the largest capital-return commitments in technology sector history. The company also committed to returning 50% of free cash flow to shareholders in calendar 2026.

Q1 FY2027 Beat Precedes Capital Return Announcement

The announcement followed Nvidia's Q1 FY2027 (February–April 2026) results that exceeded analyst consensus, driven by sustained AI data-center GPU demand. Management expressed strong confidence in the durability of the AI infrastructure investment cycle. The stock gained 1.3% to $223.47 on announcement day, a muted reaction that analysts attributed to market expectations already pricing in continued outperformance.

Analyst View: The Apple Playbook

Evercore ISI analyst Mark Lipacis drew a direct parallel to Apple's valuation trajectory after it initiated large-scale buybacks: "We expect the same to occur for Nvidia," predicting P/E multiple expansion as institutional ownership broadens. Bank of America's Vivek Arya argued that increased shareholder returns could "expand ownership, close Nvidia's valuation gap relative to peers, and minimize circularity concerns" — a reference to the feedback loop between Nvidia's largest customers (cloud hyperscalers) and its strategic chip supply position.

Strategic Significance

The $80 billion buyback signals a strategic pivot in capital allocation: after years of reinvesting nearly all excess cash into AI infrastructure and R&D, Nvidia is declaring a phase of mature-company capital discipline. The combined $119 billion repurchase capacity is comparable only to Apple and Saudi Aramco at their respective capital-return peaks. Global semiconductor stocks — including KOSPI-listed companies that supply HBM to Nvidia — rallied on the AI demand confidence signal embedded in the earnings commentary.

What to watch: Q2 FY2027 earnings report (July–October 2026); U.S. export control policy on advanced AI chips to China; cloud hyperscaler capex guidance; and whether the $0.25 per-share dividend is maintained through the full fiscal year.

Not investment advice. Verify all figures with primary sources before acting.