On September 2, 2026, NVIDIA CEO Jensen Huang spoke at the G20 Innovation Ministers' Meeting held in Chapel Hill, North Carolina.

Key points

NVIDIA has raised its stock buyback program to a record high; its current earnings-based price-to-earnings ratio sits at a low level compared with peers.

CEO Jensen Huang had already signaled his intention to buy back NVIDIA stock.

Karan Ramchandani, managing director at Post Oak Group, said: "Companies treating their own stock as the best investment for the coming year is a very healthy signal."

When NVIDIA (NASDAQ: NVDA) announced an additional stock buyback plan on Monday, the chipmaker's share price was, by one key metric, in its cheapest range in a decade.

CEO Jensen Huang sees this as a rare opportunity to buy at a low price.

NVIDIA trades at just 14.5 times earnings for fiscal 2028, which begins next February, higher among large tech giants only than Micron.

The company's average price-to-earnings ratio over the past five years was 62.9 times, more than double the current valuation level.

The compression in the valuation of this company, now worth more than $5.5 trillion and the most valuable in the world, comes amid an AI wave that has driven the chipmaker to repeatedly post historic profit growth.

NVIDIA shares have risen 23% this year, outperforming the Nasdaq index, but the share price gain has not kept pace with the growth rate of earnings expectations.

Analysts widely expect NVIDIA's net profit for fiscal 2028 to approach $385 billion, up 60% year over year and more than five times higher over three years.

As a result, NVIDIA announced on Monday an additional $150 billion in stock buyback authorization.

Back in May this year, the company had already rolled out an $80 billion buyback plan, while raising its quarterly cash dividend to 25 cents per share from 1 cent per share.

Karan Ramchandani, managing director at Post Oak Group, said in an interview that this large buyback is a clear signal that management believes the company's stock is undervalued. "Looking at the price-to-earnings ratio, you can see that earnings growth has outpaced the share price. Companies treating buybacks as their best investment for the coming year is a very healthy signal."

NVIDIA shares rose nearly 2% on Monday; on the same day, the company also released a new software and hardware solution for governing AI agents.

A "growth value stock"

Riding demand for GPUs used to build and run AI models and services, NVIDIA's revenue and cash flow have exploded, and the company has stepped up capital returns accordingly.

In its August earnings report, the company signaled that growth would continue at least into early 2028: it expects fiscal 2028 sales to grow 70%, meaning revenue scale will greatly exceed Wall Street's previous expectations.

Earlier this month, Huang told investors at a Goldman Sachs conference that the market "misunderstands NVIDIA" and that the company's valuation should be higher, both in terms of growth and in terms of value based on future earnings.

"We are the world's first and only growth value stock," Huang said. "People always want to put us in one category, but we have both growth and value attributes."

Huang did not just talk the talk. Last month, when he interviewed Jim Cramer, he said bluntly: "Buying back NVIDIA stock is a huge opportunity." Now the company is putting real money behind it.

NVIDIA previously said it plans to return about half of its free cash flow to investors through buybacks and dividends.

If the entire current buyback authorization is used, the company's number of shares outstanding could shrink by 4%.

Huang said on Monday on the program "Squawk Box": "We will generate a lot of cash in the coming years. As cash continues to accumulate, we want to return funds to shareholders."

Gene Munster, a partner at Deepwater Asset Management, said on Monday on "Fast Money" that investors worry NVIDIA's growth will eventually slow after several consecutive years of rapid expansion. "It is hard for investors to be sure that high growth can be maintained. It is precisely this expectation of slowing growth that has depressed the company's valuation."

On the same basis of calculation, NVIDIA's 14.5 times fiscal 2028 price-to-earnings ratio is lower than Apple's 35.5 times, Alphabet's 22.6 times, Microsoft's 21.7 times and Amazon's 23.2 times; it is also lower than major AI data center chip competitors: Broadcom at 18.2 times, AMD at 38.2 times and Intel at 54.7 times.

None of those competitors can forecast 70% revenue growth for next year.

Broadcom's chip business mainly develops custom chips for companies such as OpenAI and Google. AMD competes with NVIDIA in the GPU arena, but its market share is only a small fraction of NVIDIA's. Intel focuses on CPUs and also has a presence in AI chips, but it currently has no product that can match NVIDIA's GPUs.

Melius Research analyst Ben Reitzes maintains a buy rating on NVIDIA and believes "given its growth rate, the valuation should be higher."

"Continuing to step up large-scale buybacks will help improve the valuation predicament and lift the company's valuation," Reitzes said on Monday on the program "Closing Bell."

UBS analysts estimated in a research note on Monday that the increased buyback is expected to add 8 cents to NVIDIA's earnings per share for calendar year 2027, with full-year EPS estimated at $17.16.