{"id":51123,"date":"2023-08-29T13:20:02","date_gmt":"2023-08-29T13:20:02","guid":{"rendered":"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders"},"modified":"2023-08-29T13:54:08","modified_gmt":"2023-08-29T13:54:08","slug":"nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders","title":{"rendered":"Nvidia\u2019s $25 billion buyback \u2018a head-scratcher\u2019 for some shareholders"},"content":{"rendered":"

Africa-Press – Rwanda. <\/strong><\/span>Nvidia\u2019s (NVDAO) move to buy back $25 billion of its shares after its stock has more than tripled this year caught some investors off-guard, even as they cheered a stellar second-quarter report.<\/p>\n

Shares of Nvidia touched a record high on Thursday, a day after the company blew past expectations with its quarterly revenue forecast as an artificial-intelligence boom fueled demand for its chips.<\/p>\n

Nvidia shares, which had run up in the days leading up to its report, climbed more than 6% on Thursday but pared gains to end the day little changed. However, Nvidia\u2019s stock buyback \u2013 the fifth-biggest repurchase announcement among U.<\/p>\n

S. -based companies this year, according to EPFR \u2013 surprised some investors. Companies commonly repurchase their stock as a way to return capital to shareholders.<\/p>\n

Such buybacks can benefit a stock\u2019s price by reducing the supply of shares and increasing demand, and can boost earnings per share, a closely watched investor metric.<\/p>\n

But while shareholders often see buybacks as an encouraging sign when a company\u2019s stock appears cheap, Nvidia\u2019s shares have shot up some 220% in 2023, leaving investors searching for the reasons behind the company\u2019s move.<\/p>\n

\u201cIt\u2019s a little bit of a head-scratcher,\u201d said King Lip, chief strategist at Baker Avenue Wealth Management, which has $2.5 billion in assets under management and counts Nvidia as a top-10 holding.<\/p>\n

\u201cAs a shareholder, we like to see stock buybacks, but for a company like Nvidia that is growing so fast, you kind of want to see their earnings being plowed back in to the company,\u201d Lip added.<\/p>\n

As opposed to companies with sluggish financial performance growth that turn to buybacks to help prop up earnings per share, the announcement from Nvidia \u201ccomes as a surprise\u201d given that they are \u201ca hot growth tech name,\u201d said Daniel Morgan, senior portfolio manager at Synovus Trust, which owns Nvidia shares.<\/p>\n

\u201cThe message seems to be that (Nvidia\u2019s) management believes that their stock is undervalued,\u201d Morgan said. For some investors, an \u201cundervalued\u201d Nvidia might be a difficult message to stomach.<\/p>\n

Nvidia shares traded at 45 times forward 12-month earnings estimates as of Wednesday compared with about 19 times for the overall S&P 500 (. SPX), according to Refinitiv Datastream.<\/p>\n

\u201cHistorically, you\u2019d love it when a company is able to buy their stock back when it is depressed, but I don\u2019t think anybody can make the case that it is at a depressed place right now,\u201d said Tom Plumb, CEO and lead portfolio manager at Plumb Funds, which has Nvidia as one of its largest holdings.<\/p>\n

However, Plumb said, the company might be limited in how it can deploy its resources after its deal to buy semiconductor designer Arm Holdings Ltd collapsed last year amid regulatory concerns.<\/p>\n

\u201cThey\u2019re generating incredible amounts of cash, more than they need for their current investment strategy, and they\u2019re prohibited from buying significant complementary businesses,\u201d Plumb said.<\/p>\n

\u201cSo what are they going to do with their cash?\u201d Nvidia spent about 27% of revenue on research and development last year, in line with rival chip companies. The company did not immediately respond to a request for comment.<\/p>\n

In its second-quarter earnings release on Wednesday, Nvidia said its board approved $25 billion in additional share repurchases \u201cwithout expiration,\u201d and that the company plans to continue repurchases this fiscal year.<\/p>\n

Despite the staggering dollar amount, Nvidia\u2019s buyback amounted to only 2.1% of its nearly $1.2 trillion market value, or buyback yield, as of Wednesday.<\/p>\n

That is less than the historic 2.58% buyback yield for the overall S&P 500, when looking over one-year periods, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.<\/p>\n

Meanwhile, several other megacap tech and growth companies have announced even bigger buybacks this year: Apple (AAPL. O) at $90 billion, Alphabet (GOOGL. O) at $70 billion and Meta Platforms (META. O) at $40 billion.<\/p>\n

Tech companies tend to prefer using cash for buybacks over dividends, because \u201cif they are on the hook for a dividend every quarter that may hinder their ability to take advantage of growth opportunities,\u201d said Daniel Klausner, head of U.<\/p>\n

S. public equity advisory at Houlihan Lokey. Indeed, some investors welcomed Nvidia\u2019s buyback decision. \u201cIt\u2019s a show of confidence,\u201d said Francisco Bido, senior portfolio manager for F\/M Investments\u2019 large cap focused fund, which holds Nvidia shares.<\/p>\n

\u201cIf they had better use for (the cash), I am pretty sure they would have done it.\u201d<\/p>\n

For More News And Analysis About Rwanda<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Rwanda. Nvidia\u2019s (NVDAO) move to buy back $25 billion of its shares after its stock has more than tripled this year caught some investors off-guard, even as they cheered a stellar second-quarter report. Shares of Nvidia touched a record high on Thursday, a day after the company blew past expectations with its quarterly […]<\/p>\n","protected":false},"author":84,"featured_media":51121,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,31],"tags":[760,763,3468,758],"class_list":["post-51123","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-miscellaneous","tag-africa-press","tag-africa-press-rwanda","tag-nvdao","tag-rwanda"],"yoast_head":"\nNvidia\u2019s $25 billion buyback \u2018a head-scratcher\u2019 for some shareholders - Rwanda<\/title>\n<meta name=\"description\" content=\"Nvidia\u2019s (NVDAO) move to buy back $25 billion of its shares after its stock has more than tripled this year caught some ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Nvidia\u2019s $25 billion buyback \u2018a head-scratcher\u2019 for some shareholders\" \/>\n<meta property=\"og:description\" content=\"Nvidia\u2019s (NVDAO) move to buy back $25 billion of its shares after its stock has more than tripled this year caught some ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders\" \/>\n<meta property=\"og:site_name\" content=\"Rwanda\" \/>\n<meta property=\"article:published_time\" content=\"2023-08-29T13:20:02+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-08-29T13:54:08+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/rwanda\/sites\/23\/2023\/08\/sm_1693304370.297028.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"960\" \/>\n\t<meta property=\"og:image:height\" content=\"639\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Nvidia\u2019s $25 billion buyback \u2018a head-scratcher\u2019 for some shareholders\",\"datePublished\":\"2023-08-29T13:20:02+00:00\",\"dateModified\":\"2023-08-29T13:54:08+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders\"},\"wordCount\":755,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/rwanda\/sites\/23\/2023\/08\/sm_1693304370.297028.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Rwanda\",\"NVDAO\",\"Rwanda\"],\"articleSection\":[\"all news\",\"Miscellaneous\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders\",\"url\":\"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders\",\"name\":\"Nvidia\u2019s $25 billion buyback \u2018a head-scratcher\u2019 for some shareholders - Rwanda\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/rwanda\/sites\/23\/2023\/08\/sm_1693304370.297028.jpg\",\"datePublished\":\"2023-08-29T13:20:02+00:00\",\"dateModified\":\"2023-08-29T13:54:08+00:00\",\"author\":{\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"description\":\"Nvidia\u2019s (NVDAO) move to buy back $25 billion of its shares after its stock has more than tripled this year caught some ...\",\"breadcrumb\":{\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders#primaryimage\",\"url\":\"https:\/\/static.africa-press.net\/rwanda\/sites\/23\/2023\/08\/sm_1693304370.297028.jpg\",\"contentUrl\":\"https:\/\/static.africa-press.net\/rwanda\/sites\/23\/2023\/08\/sm_1693304370.297028.jpg\",\"width\":960,\"height\":639,\"caption\":\"Nvidia\u2019s $25 billion buyback \u2018a head-scratcher\u2019 for some shareholders\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.africa-press.net\/rwanda\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Nvidia\u2019s $25 billion buyback \u2018a head-scratcher\u2019 for some shareholders\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/#website\",\"url\":\"https:\/\/www.africa-press.net\/rwanda\/\",\"name\":\"Rwanda\",\"description\":\"Just another Africa News Agency Sites site\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.africa-press.net\/rwanda\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\",\"name\":\"cfeditoren\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Nvidia\u2019s $25 billion buyback \u2018a head-scratcher\u2019 for some shareholders - Rwanda","description":"Nvidia\u2019s (NVDAO) move to buy back $25 billion of its shares after its stock has more than tripled this year caught some ...","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders","og_locale":"en_US","og_type":"article","og_title":"Nvidia\u2019s $25 billion buyback \u2018a head-scratcher\u2019 for some shareholders","og_description":"Nvidia\u2019s (NVDAO) move to buy back $25 billion of its shares after its stock has more than tripled this year caught some ...","og_url":"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders","og_site_name":"Rwanda","article_published_time":"2023-08-29T13:20:02+00:00","article_modified_time":"2023-08-29T13:54:08+00:00","og_image":[{"width":960,"height":639,"url":"https:\/\/static.africa-press.net\/rwanda\/sites\/23\/2023\/08\/sm_1693304370.297028.jpg","type":"image\/jpeg"}],"author":"cfeditoren","twitter_card":"summary_large_image","twitter_misc":{"Written by":"cfeditoren","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders#article","isPartOf":{"@id":"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders"},"author":{"name":"cfeditoren","@id":"https:\/\/www.africa-press.net\/rwanda\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb"},"headline":"Nvidia\u2019s $25 billion buyback \u2018a head-scratcher\u2019 for some shareholders","datePublished":"2023-08-29T13:20:02+00:00","dateModified":"2023-08-29T13:54:08+00:00","mainEntityOfPage":{"@id":"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders"},"wordCount":755,"commentCount":0,"image":{"@id":"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders#primaryimage"},"thumbnailUrl":"https:\/\/static.africa-press.net\/rwanda\/sites\/23\/2023\/08\/sm_1693304370.297028.jpg","keywords":["Africa Press","Africa Press-Rwanda","NVDAO","Rwanda"],"articleSection":["all news","Miscellaneous"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders","url":"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders","name":"Nvidia\u2019s $25 billion buyback \u2018a head-scratcher\u2019 for some shareholders - Rwanda","isPartOf":{"@id":"https:\/\/www.africa-press.net\/rwanda\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders#primaryimage"},"image":{"@id":"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders#primaryimage"},"thumbnailUrl":"https:\/\/static.africa-press.net\/rwanda\/sites\/23\/2023\/08\/sm_1693304370.297028.jpg","datePublished":"2023-08-29T13:20:02+00:00","dateModified":"2023-08-29T13:54:08+00:00","author":{"@id":"https:\/\/www.africa-press.net\/rwanda\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb"},"description":"Nvidia\u2019s (NVDAO) move to buy back $25 billion of its shares after its stock has more than tripled this year caught some ...","breadcrumb":{"@id":"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders#primaryimage","url":"https:\/\/static.africa-press.net\/rwanda\/sites\/23\/2023\/08\/sm_1693304370.297028.jpg","contentUrl":"https:\/\/static.africa-press.net\/rwanda\/sites\/23\/2023\/08\/sm_1693304370.297028.jpg","width":960,"height":639,"caption":"Nvidia\u2019s $25 billion buyback \u2018a head-scratcher\u2019 for some shareholders"},{"@type":"BreadcrumbList","@id":"https:\/\/www.africa-press.net\/rwanda\/all-news\/nvidias-25-billion-buyback-a-head-scratcher-for-some-shareholders#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.africa-press.net\/rwanda\/"},{"@type":"ListItem","position":2,"name":"Nvidia\u2019s $25 billion buyback \u2018a head-scratcher\u2019 for some shareholders"}]},{"@type":"WebSite","@id":"https:\/\/www.africa-press.net\/rwanda\/#website","url":"https:\/\/www.africa-press.net\/rwanda\/","name":"Rwanda","description":"Just another Africa News Agency Sites site","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.africa-press.net\/rwanda\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.africa-press.net\/rwanda\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb","name":"cfeditoren"}]}},"_links":{"self":[{"href":"https:\/\/www.africa-press.net\/rwanda\/wp-json\/wp\/v2\/posts\/51123","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.africa-press.net\/rwanda\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.africa-press.net\/rwanda\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.africa-press.net\/rwanda\/wp-json\/wp\/v2\/users\/84"}],"replies":[{"embeddable":true,"href":"https:\/\/www.africa-press.net\/rwanda\/wp-json\/wp\/v2\/comments?post=51123"}],"version-history":[{"count":0,"href":"https:\/\/www.africa-press.net\/rwanda\/wp-json\/wp\/v2\/posts\/51123\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.africa-press.net\/rwanda\/wp-json\/wp\/v2\/media\/51121"}],"wp:attachment":[{"href":"https:\/\/www.africa-press.net\/rwanda\/wp-json\/wp\/v2\/media?parent=51123"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.africa-press.net\/rwanda\/wp-json\/wp\/v2\/categories?post=51123"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.africa-press.net\/rwanda\/wp-json\/wp\/v2\/tags?post=51123"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}