Nvidia made one of the biggest buyback announcements ever. It may not be enough.

By Britney Nguyen

The raise shows confidence in the business, but some analysts want to see it go higher

Nvidia, led by CEO Jensen Huang, upped its share repurchase commitment on Wednesday.

Nvidia's swelling cash flows had some investors anticipating an update on capital returns leading into its earnings report on Wednesday. While the company delivered on those hopes, some are feeling it wasn't enough.

The chip maker (NVDA) announced an additional $80 billion share-repurchase authorization on top of the $38.5 billion remaining in its previous program, and bumped its quarterly cash dividend to 25 cents per share from 1 cent. At $80 billion, the buyback authorization is the largest for any company ever, aside from Apple (AAPL), as of April, according to data from Birinyi Associates.

UBS analyst Timothy Arcuri said before the report that he could see Nvidia upping its share-repurchase commitment to $150 billion over the next 12 months. Wednesday's report didn't quite meet that mark. Still, he noted that Nvidia raised its dividend, which he had previously said investors were also pushing for.

Given Nvidia's commentary that it plans to return about 50% of free cash flow to investors this year, Arcuri is modeling for that to be around $210 billion, meaning the company will have to repurchase about $69 billion in shares over the next three fiscal quarters, he said in a Thursday note. He expects the repurchase "to be even slightly higher than this."

See more: Is Nvidia spending its cash on the right things? Investors will soon get an update.

Cantor Fitzgerald analyst C.J. Muse said he "would have hoped for a much larger, multiyear announcement" on buybacks based on Nvidia's plans for free cash flow. Muse said he expects Nvidia to return $1 trillion to shareholders over the next five years, making its latest share authorization appear a bit dismal. Still, there's a chance his model is "just early," he wrote in a Wednesday note.

John Belton, a portfolio manager at Gabelli Funds, also expects Nvidia to return upward of $1 trillion to shareholders in the next few years. That's an important "part of the story for a stock that's trading" at a relatively low valuation of below 20 times price-to-earnings, he said in emailed comments.

Though the buyback authorization was disappointing to some, to Mark Malek, chief investment officer at Siebert Financial, the shareholder returns were "not generosity," but "a confession."

Nvidia CEO Jensen Huang is looking at an overwhelming amount of cash "that he has literally run out of productive places to put it fast enough," Malek said in emailed comments. In his view, Nvidia's reinvestments being outpaced by its cash generation "make it look more like a value stock than ever before."

It's a positive signal that Nvidia is trying to deliver shareholder returns as it expects growth for both revenue and profit to slow down compared with previous years, Melissa Otto, head of research at S&P Global Visible Alpha, told MarketWatch. Nvidia's decision to increase its dividend and buybacks "does present interesting questions about uses of cash and what the company views as being the right trajectory," Otto added.

Malek noted that Nvidia is spending its money another way - by investing in its AI-infrastructure ecosystem. So far this year, Nvidia has committed more than $40 billion in equity investments in certain technologies, Malek said: OpenAI's fundraising round, glassmaker Corning (GLW) for optical fiber and photonics players Lumentum Holdings (LITE) and chip-components maker Coherent (COHR).

"Jensen is essentially running a sovereign wealth fund out of chip profits, and so far the returns are staggering," Malek said, noting that Nvidia generated almost $97 billion in free cash flow last year.

Those investments have been viewed by some as circular financing, which Malek said is a fair concern. In his view, however, Nvidia is a profitable company that has the means to deploy its capital in ways that will mean more returns.

Malek added that Nvidia's boost to dividend and buyback authorization reflects a CEO who can see "the hypergrowth chapter has a last page, and who may be engineering the transition before the market forces his hand."

Don't miss: Nvidia's Jensen Huang wants to be king of a brand-new empire.

-Britney Nguyen

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05-22-26 0833ET