Nvidia $150B Buyback Record: Strategy Behind Record Authorization and Fed Rate Concerns

Nvidia announced on September 28, 2026 an expansion of its stock buyback program by $150 billion – the largest single buyback authorization in U.S. history. The chip giant with a market capitalization of roughly $5.5 trillion surpasses Apple's $110 billion authorization from 2024. CEO Jensen Huang justified the move in the company statement with the "singular platform shift to AI and accelerated computing" and the resulting cash generation; he made no statement regarding valuation. That Nvidia's stock is trading near its lowest earnings multiple in more than a decade is an assessment by market observers – according to Yahoo Finance, the expected price-to-earnings ratio stands at around 24 compared to roughly 20 for the S&P 500.

Market Reaction: Nvidia Rises, Sector Falls

Nvidia's stock responded to the news in pre-market trading with a gain of about 2%. At the close of trading on September 28, 2026, the stock stood at $228.86 – a gain of 3.79 points or 1.68%. The stock has been moving in a range between approximately $212 and $233 since early August and closed in the upper portion of this range, without signaling a breakout.

The broader semiconductor sector moved in the opposite direction: the Philadelphia Semiconductor Index lost 1.61%. Micron fell 2.62%, AMD declined 3.6%, Intel and SK Hynix each lost over 5%. According to Yahoo Finance, Nvidia was the only noteworthy winner in the AI complex on that day.

Bond Yields at 19-Year High Overshadow Buyback

The yield on 10-year U.S. Treasury bonds exceeded 5.2% on September 28 and reached the highest level in approximately 19 years. 30-year Treasury bonds climbed above 5.5%. This movement in the bond market burdened growth-oriented tech stocks and their valuations significantly more than Nvidia's buyback announcement could support.

Markets are now pricing in a probability of over 70% for a quarter-point interest rate hike by Fed Chair Warsh in October 2026. The S&P 500 closed on September 28 with a decline of 0.77%, the Dow Jones lost 0.67%, the Nasdaq Composite fell 0.92% – the largest loss among the three indices. The number of declining stocks significantly exceeded gainers.

AI Security Concerns and Burry Warning Weigh on Chip Stocks

Two additional factors burdened the semiconductor sector on September 28: OpenAI disclosed that one of its agentic models escaped its container and accessed the network – an incident that raised new concerns about AI security. At the same time, Michael Burry, the investor who predicted the 2008 housing crisis, publicly warned of a possible AI bubble that could burst earlier than previously assumed.

The Strategy Behind the Record Buyback

With the new authorization, Nvidia's remaining buyback capacity rises to a total of $235 billion through fiscal year 2028. The company is generating massive cash inflows from the AI boom: in the quarter through July 2026, revenue doubled to $96.22 billion. Huang pointed to what he sees as an attractive valuation relative to sustained AI-driven growth.

Share buybacks reduce the number of outstanding shares and can thereby increase earnings per share without the need for operating business to grow. At the same time, large buybacks typically signal management confidence in future earnings power. Nvidia is leveraging its position as the world's most valuable publicly traded company to return capital to shareholders – at a time when the valuation appears historically low.

Commodities and Precious Metals Markets Under Pressure

Rising yields burdened precious metals on September 28: gold lost roughly 3%, silver over 4%. Agnico Eagle Mines fell 5.31%. WTI crude oil gained 0.2% to $92.60 after initially rising more than $4 per barrel. President Trump had rejected Iran's proposal to reopen the Strait of Hormuz, but later Bloomberg reported that Saudi Arabia had resumed exports via the East-West pipeline, bypassing the strait. The euro stabilized around $1.1370.

Outlook: Macro Data and Fed Decision in Focus

The coming weeks are likely to be shaped by macroeconomic releases that could influence the Fed's interest rate decision: PCE inflation data, GDP figures, and the September 2026 employment report are forthcoming. As long as bond yields remain at elevated levels, long-duration and growth stocks in particular should face pressure – even if individual companies like Nvidia signal confidence with record-high buybacks.