A New Tailwind Emerges for Nvidia Stock -- Share Repurchases
Shares of top semiconductor company Nvidia (NASDAQ: NVDA) have rallied sharply off of 52-week lows, increasing over 40% from mid-October through November. However, the top AI stock remains over 50% down from all-time highs as it and other high-growth companies get clobbered by the bear market of 2022.
Nvidia has been taking aggressive action to correct an oversupply of GPUs (graphics processing units) used for high-end video game graphics. Demand for its data center hardware is largely offsetting this temporary weakness, creating hope that Nvidia will return to overall expansion in 2023. However, even at this early stage of a cyclical downturn (or, more accurately, a cyclical slowdown) for the chip industry, Nvidia still has levers it can pull to keep investor engagement running high. To wit: In its latest quarter, Nvidia showed off its ability to return excess cash to shareholders via share repurchases.
Nvidia's balance of cash and short-term investments had been steadily growing through the end of 2021. Some of this cash was going to get used up in the acquisition of ARM Holdings from current owner Softbank, but that got shot down by regulators.
Source Fool.com
