NVIDIA shares and the 40 billion bet: wrong decision or strategic move?

• NVIDIA invested over $40 billion in stock buybacks, accounting for about a third of its net profit
• Critics see missed opportunities when investing in AI, infrastructure and research
• Management and strategy speak for a conscious bet on one’s own strength in the AI ​​age

$40 Billion for Stock Buybacks: An Unusual Priority?

NVIDIA represents the current AI boom like no other company. The share price has multiplied in recent years and catapulted the group to the top of the global stock exchanges. Investors are now looking even more closely at how the company handles its capital.

In fiscal year 2026, a particularly large amount flowed into share buybacks. NVIDIA invested more than 40 billion US dollars in this. According to The Motley Fool, this corresponds to about a third of net income and is significantly higher than investments in fixed assets. This is exactly where the criticism comes in. Some market observers question whether this money would not have been better spent on research, development or additional capacity to further expand its position in the AI ​​market.

Record numbers and AI boom: Did NVIDIA even have an investment problem?

At the same time, the business figures provide a strong counterargument. NVIDIA continues to grow at a pace that stands out even in the technology sector. In fiscal year 2026, sales increased by 65 percent to around $215.9 billion. New records were also achieved in terms of winnings.

From a management perspective, there appears to be no acute pressure to direct additional capital into the core business. According to The Motley Fool, NVIDIA already has a broad technological base with powerful GPUs, the CUDA platform and numerous investments in the AI ​​ecosystem. In this context, CFO Colette Kress made it clear that the use of capital was being considered very carefully. We are convinced that “we are using our capital in the right places,” she explained.

Doubts about growth: Why investors still react nervously

Despite the strong numbers, the reaction on the stock market has recently remained muted. As Reuters reports, NVIDIA shares came under pressure after the quarterly results. Investors are increasingly focusing less on current results and more on the question of how sustainable growth is.

One reason for this is the changing competitive environment. According to Reuters, major cloud providers are increasingly working on their own chips, while competitors such as AMD are expanding their position. At the same time, investments in AI infrastructure are increasing massively across the industry. An analyst from eMarketer summed it up: The crucial question now is how high the actual benefits of these investments will be. In this environment, share buybacks seem like a missed opportunity for some investors to strengthen operations even more aggressively.

Strategic logic: buybacks as an indirect AI bet?

At second glance, however, the decision can also be read differently. According to “The Motley Fool,” NVIDIA is ultimately betting on itself with the buybacks. If the company maintains and expands its dominant role in the AI ​​market, shareholders will benefit directly from a lower share count and increasing earnings per share.

At the same time, NVIDIA is by no means idle. According to Reuters, the group continues to make targeted investments in its ecosystem, for example with a $2 billion stake in Marvell. The aim is to play a central role in a market with more customized chips and to further expand our own platform.

This reveals a differentiated picture. The $40 billion is not an isolated move, but part of a broader strategy. Whether this decision ultimately proves to be a mistake or a smart move depends primarily on how the AI ​​market develops in the coming years.

Benedict Kurschat, editorial team at finanzen.net

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