NVIDIA’s $25 Billion Share Repurchase Plan – Buyback Wednesdays

Key Insights:

• Trading close to its all-time high, NVIDIA’s astounding 241% increase in share price this year has propelled the company into the exclusive trillion-dollar market cap club.
• NVIDIA with its high-performance processors is a big beneficiary of the renewed enthusiasm for AI.
• The “Data Center” subsegment is the major driver of the company’s growth and contributes 70% of the company’s revenue. Q2 2023 revenue in this segment was up 171% year-over-year and more surprisingly up 141% compared to last quarter.

NVIDIA Corporation (NVDA) earned itself a position as the top performer in the S&P500 this year, after shocking investors with its blowout second-quarter earnings last week. The company exceeded all expectations and forecasted even more growth in the next quarter. The company guided towards revenue of $16 billion in Q3 2023, representing 170% year-over-year growth.

For the better part of two decades NVIDIA has held the lead in graphics processing units (GPUs) and I recollect that in the early 2000s, the graphics card market was a duopoly between ATI Technologies and NVIDIA. I held a position in ATI Technologies before it was acquired by AMD in 2006.

In recent years NVIDIA has expanded that lead, especially as its processors found new applications in bitcoin mining and more importantly in machine learning. While AMD is a close second when it comes to GPUs related to gaming, NVIDIA has taken a significant lead in processors built for data centers (DPUs) and AI.

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