TL;DR — Nvidia raised its buyback authorization by $150 billion to $235 billion on September 28. In the first half of fiscal 2027 it spent $39.8 billion repurchasing 203 million shares, yet its share count fell only 0.6% because employee equity kept adding shares. Finishing on schedule requires more than doubling the pace.
On September 28, Nvidia’s board added $150 billion to its share repurchase authorization, lifting the remaining total to $235 billion. The company called it the largest authorization increase in history and said it expects to use the full amount through fiscal 2028. The stock rose 2.8% that day, according to CNBC, for a market value of $5.42 trillion. The filings show what the buyback has actually done to the share count so far, which is less than the headline suggests.
Nvidia Retired 226 Million Shares in Six Months and Issued 69 Million Back
Nvidia’s 10-Q for the quarter ended July 26 shows 203 million shares repurchased for $39.8 billion in the first half of fiscal 2027. Another 23 million shares were withheld to cover employee taxes, at a cost of $4.5 billion. Together, that is 226 million shares removed for $44.4 billion.
Against that, Nvidia issued 69 million new shares through its employee equity plans. Shares outstanding went from 24.304 billion in January to 24.147 billion in July, a net decline of 157 million, or 0.6%. Roughly three of every ten shares Nvidia retired were replaced by new ones. Stock-based compensation expense was $4.0 billion over the six months.
This is the standard pattern at large-cap tech companies, and it changes how an authorization should be read. A buyback first absorbs dilution, and only then shrinks the count. Nvidia did change one thing this year: starting in the first quarter of fiscal 2027, its non-GAAP figures no longer exclude stock-based compensation. The cost now sits in the headline earnings number rather than in a reconciliation table.
Second-Quarter Shareholder Returns Exceeded Free Cash Flow by $4.7 Billion
Nvidia returned about $26.0 billion to shareholders in the second quarter: $19.7 billion through buybacks and $6.0 billion through dividends. Free cash flow in the same quarter was $21.3 billion, down from $48.6 billion in the first quarter. The difference came from cash on hand and new borrowing.
The cash flow statement explains the drop. Over six months, accounts receivable absorbed $24.6 billion and inventories $10.2 billion. Net income of $118.0 billion also included $23.7 billion of gains on equity securities, which produce no cash. Operating cash flow for the half was $74.4 billion.
In the second quarter Nvidia also took in $24.9 billion of net proceeds from new debt, bringing senior notes outstanding to $33.5 billion. In May the quarterly dividend went from $0.01 to $0.25 per share, which turned a $244 million quarterly payment into a $6.0 billion one. With $56.6 billion in cash and marketable debt securities, the balance sheet is not strained. Returns are simply no longer covered by a single quarter’s cash.
- $235 billion remaining after the increase, to be used through fiscal 2028, which ends in January 2028
- $99.0 billion remaining on July 26, which implies roughly $14 billion was used between the quarter end and the announcement
- $196 average price per share in the first half ($39.8 billion for 203 million shares)
- About 4.3% of Nvidia’s $5.42 trillion market value on the day of the announcement
Finishing on Schedule Requires More Than Twice the Current Pace
The schedule is the part worth modeling. October 2026 through January 2028 is about 16 months, or a little more than five fiscal quarters. Spending $235 billion in that window works out to roughly $44 billion a quarter. Nvidia’s buyback spending in the second quarter was $19.7 billion.
Nvidia’s new authorization implies about $44 billion a quarter of buybacks. Last quarter it spent $19.7 billion, and even that was more than free cash flow covered after dividends.
That pace works only if free cash flow returns to first-quarter levels and stays there. Nvidia guided third-quarter revenue to $108.0 billion, up from $96.2 billion, so the earnings base is still growing. The constraint is working capital, not profit. If receivables and inventory keep absorbing cash at the first-half rate, the $235 billion works as a ceiling rather than a plan.
Alphabet Went the Other Way: Zero Buybacks and $49.6 Billion of New Equity
The contrast with Alphabet, one of the largest buyers of AI hardware, is direct. In the second quarter of 2026, Alphabet repurchased no stock, against $13.2 billion a year earlier. In June it raised $49.6 billion by selling Class A and Class C shares plus mandatory convertible preferred stock, and it issued $20.3 billion of senior notes. We covered what that did to per-share math in our look at Alphabet’s buyback going to zero.
The two companies now sit on opposite sides of the AI trade. Nvidia sells the equipment and collects the cash, while the companies building AI data centers raise equity and debt to pay for it. Because Nvidia’s revenue is concentrated, as shown when four customers accounted for 61% of it, part of the cash funding this buyback likely traces back to companies issuing securities of their own.
What to watch next: Nvidia’s next quarterly report will show how much of the $235 billion was used after the announcement and whether free cash flow recovered from $21.3 billion. Track the net change in shares outstanding, not the dollar amount repurchased. Watch receivables too: a further build would mean more reported revenue is still waiting to turn into cash.
Sources: Nvidia’s Form 10-Q for the quarter ended July 26, 2026 and second-quarter fiscal 2027 earnings release on SEC EDGAR; the September 28, 2026 announcement on Nvidia’s investor relations site; Alphabet’s second-quarter 2026 earnings release; market data from CNBC. Disclosure: the author has no position in Nvidia and holds a long position in Alphabet. Nothing here is investment advice. Full disclosure is on the About page.
