The company intends to repurchase a large amount of shares through January 2028, reflecting 'confidence in the long-term opportunity ahead'

Nvidia's Jensen Huang says the company can both invest in its business and return cash to shareholders.

Nvidia's stock is rising on Monday after the chip giant delivered a historic buyback announcement.

The company said it is boosting its share-repurchase authorization by $150 billion. Since Nvidia (NVDA) already had a substantial amount remaining via its prior authorization, management now has $235 billion available through its buyback program.

Nvidia intends to execute on the remaining amount through fiscal year 2028, which ends in January of that year.

"Our cash generation gives us the capacity to invest in the technologies that advance this transformation and return capital to shareholders," Nvidia CEO Jensen Huang said in a release. "This authorization reflects our confidence in the long-term opportunity ahead."

Companies buy back stock as a way of returning cash to investors and often do so when executives think shares are undervalued. The process of repurchasing stock reduces the number of shares outstanding, thereby helping boost earnings per share.

This is likely the largest buyback authorization in U.S. corporate history. Based on data from Birinyi Associates in May, Apple (AAPL) previously held the crown with a $110 billion announcement made in May 2024.

-Emily Bary