Nvidia has raised the cap on its stock buyback program by a record $150 billion, a move that reflects the strength of cash flows generated by the boom in artificial intelligence spending, and comes at a time when the chip company's stock is trading at one of the lowest multiples of future earnings in more than a decade.
Nvidia shares, headquartered in Santa Clara, California, rose by about 2 percent on Monday, after recording gains of more than 20 percent since the beginning of the year until Friday’s close.
The new authorization brings the remaining capacity of the stock repurchase program to $235 billion, and the company expects to use this amount until fiscal year 2028, benefiting from the growing demand for chips to train and operate artificial intelligence models to enhance liquidity generation.
Nvidia's decision comes as the activity of American companies in repurchasing their shares declines, as repurchase operations decreased by about 50 percent during the period from July to September 23.
The company's CEO, Jensen Huang, said that the power of generating liquidity allows NVIDIA to invest in the technologies that drive this transformation, in addition to returning capital to shareholders.
The value of the new mandate, amounting to $150 billion, exceeds the market value of about 84 percent of the companies listed in the Standard & Poor’s 500 index, according to data collected by LSEG.
Nvidia shares are trading at about 16.5 times expected profits for the next twelve months, which is the lowest multiple since January 2015, and well below the 15-year average of about 30 times, according to LSEG data. Some analysts believe that the lower multiple reflects declining earnings growth expectations.
eMarketer analyst Jacob Bourne said that the boom in building artificial intelligence infrastructure will not continue forever at the current pace, but Nvidia's move indicates its confidence in the continued demand for its devices and services.
He added that the company's strong liquidity generation allows it to continue investing heavily in its activity, in parallel with returning capital to shareholders.
NVIDIA ended the fiscal quarter ending in July with a cash and cash equivalent balance of $22.44 billion, after it announced last May a share buyback program worth $80 billion.
Last month, the company forecast its revenues would grow by about 70 percent by fiscal year 2028, in a message aimed at reassuring investors wondering how long strong spending on artificial intelligence can continue, after years of rapid growth.
The electrical interconnection project between Saudi Arabia and Egypt, one of the largest and most ambitious energy projects in the region, is close to entering the stage of actual operation following an official Egyptian announcement of the completion of work on the Egyptian side and the project entering the stages of trial operation.
This strategic project, with investments amounting to about $1.8 billion and a mutual capacity of up to 3,000 megawatts, is not only a step to enhance the efficiency of the national grids in the two countries, but also represents a pivotal shift in the regional and international energy map. By linking the two largest electrical networks in the Arab world, this project establishes the first nucleus of a joint Arab electricity market, and consolidates the position of the two countries as pivotal centers for energy trading and transfer between the continents of Asia, Africa and Europe.
Egyptian readiness
The Egyptian Minister of Electricity and Renewable Energy, Dr. Mahmoud Esmat, explained during a press conference on Sunday evening that the project being implemented aims to exchange energy with a capacity of 3,000 megawatts across a path extending for 1,320 kilometers, noting that from July 2024 until June 2025, the completion rates and progress achieved accelerated until the project reached the stages of trial operation.
Esmat confirmed that all engineering and implementation work on the Egyptian side of the electrical interconnection project with Saudi Arabia has been completed, and that only a small part of the work, technical tests, and final preparations remain on the Saudi side.
The work undertaken in Egypt included the construction of the 500 kilovolt “Badr” transformer station, and the 320-kilometre-long overhead line between Badr and Taba, in addition to the construction of giant Suez Canal crossing towers that rise more than 220 meters to ensure the smooth and safe transfer of energy, in preparation for the start of the actual exchange between the two countries.
On February 15, during a meeting with President Abdel Fattah El-Sisi, the Minister of Electricity stated that the electrical interconnection project between Egypt and Saudi Arabia will play an important role in stabilizing the national electricity grid during the summer, which represents peak usage.
Technical specifications
According to official Egyptian information, the project is one of the largest electrical interconnection projects in the region with investments estimated at about $1.8 billion, and operates with an exchange capacity of up to 3,000 megawatts. The project consists of 3 huge high-voltage transformer stations: the first in eastern Medina in the Kingdom, the second in the Tabuk region in Saudi Arabia, and the third in Badr City, east of Cairo in Egypt.
These stations are connected by overhead lines with a length of about 1,350 km, in addition to underwater marine cables across the Gulf of Aqaba.
A strategic shift in regional energy security
The head of the Capital Center for Economic Studies, economic expert Khaled Al-Shafi’i, believes that the electrical interconnection project between Egypt and the Kingdom of Saudi Arabia represents a strategic shift in the region’s energy map and its security, as it enhances energy security in both countries with a capacity of up to 3,000 megawatts via high-voltage direct current lines extending over a length of 1,320 kilometers, which is approximately 8 to 10 percent of the total operational capacity reserve in Egypt.
Al-Shafi’i pointed out that this supports the stability of the national grid without the need to operate additional generating stations with high operational costs. It also reduces carbon emissions by amounts amounting to millions of tons annually as a result of the optimal use of the renewable energy mix in the two countries.
The economist stressed that this link with actual operation will achieve huge economic savings in fossil fuel consumption and maintenance costs for investment stations. The strength of the infrastructure of this project is embodied in the construction of the 500-kilovolt Badr transformer station, which is connected to an overhead line extending 320 kilometers along the “Badr-Taba” route, passing through the giant Suez Canal crossing towers that rise to more than 220 meters, to ensure the smooth and safe transfer of energy across the African and Asian continents.
Gateway to connect with Europe
In the same context, the Egyptian Minister spoke about the existing electrical interconnection projects with neighboring countries such as Sudan, Libya and Jordan, noting that studies on the interconnection project with Greece as well as Italy are currently being completed, so that Egypt will become a bridge to Europe, according to the ministry’s statement.
Regarding the regional dimension, Al-Shafi’i added that the Saudi-Egyptian project’s entry into the operational stages is the real nucleus for establishing a joint Arab electricity market. This project connects the two largest electrical networks in the Arab region, representing more than 60 percent of the total electrical energy produced in the Arab world.
This development opens broad horizons for Egypt to exploit its unique geographical location as a pivotal regional center for energy trading. It allows the Egyptian network to manage a multilateral connectivity system extending between the Arab Levant via Saudi Arabia and Jordan, the Maghreb via Libya, and Africa via the existing connectivity project with Sudan.
In addition to being the future gateway to Europe through the interconnection projects being studied and implemented with Greece, Cyprus and Italy to transfer capacities of up to 2,000 megawatts, which enhances direct economic returns and makes the region an indispensable cornerstone for energy stability and sustainability regionally and internationally.
The Turkish authorities carried out a new wave of arrests as part of investigations into manipulation and fraud in investment funds that led to turmoil in the financial markets and a sharp decline in the main Istanbul Stock Exchange index.
As part of the investigations conducted by the Office of Combating Terrorist Financing and Money Laundering of the Public Prosecution in Istanbul, an arrest warrant was issued for 10 people, executive officials linked to the “Destek” Investment Bank and the “Ozata Denizcelik” Shipbuilding and Maritime Shipping Company, including Iskender Balcı, the son of Mustafa Balcı, the son-in-law of the former Deputy Minister of Treasury and Finance and the former member of the Banking Regulation and Supervision Authority, Osman Celik, who is outside the country.
New arrests
The Istanbul Public Prosecutor's Office said on Monday that 6 of the wanted persons were arrested, including Ozgur Akayoglu, General Manager of Destek Bank, after the owner of Destek Holding Company, to which the bank belongs, Altunç Kumo, had previously been arrested on September 17, along with the owner of Ozata Denizcelik Company, Ozdemir Ata Sevin.
The vice president of the ruling Justice and Development Party for social policies, Fatma Betul Sayan Kaya, resigned from all her positions in the party headed by President Recep Tayyip Erdogan, on Saturday night - Sunday, after the New Party, the largest opposition party in the country, revealed that she and her husband, Ilyas Kaya, had achieved huge profits from trading shares in the Ozata Denizcelik police.
The resignation, which Erdogan accepted on Sunday, came after the party’s spokesman, Zeynel Emre, revealed in documents, during a press conference in Istanbul on Saturday, that she and her husband had invested about 163 million liras ($3.3 million) on April 8, most of it in the shares of the “Ozata Denizcelik” shipbuilding company, and made about 2.17 billion liras ($44 million) from selling it and withdrawing the money days before the facts of stock manipulation were revealed in a complaint. Submitted by the Capital Markets Authority on September 16.
The crisis erupted after the Authority, in early September, amended the investment rules for funds, so that the fund was no longer allowed to invest all of its assets in one share, while obligating it to diversify its investments, as a result of fears that a number of funds’ investments were concentrated in limited shares, some of which were small companies or low-liquidity shares that were difficult to sell in the markets.
The Authority decided to liquidate 131 investment funds, with a capital of $18 billion. The crisis affected more than 455 thousand individual investors, prompting the Council to give a 6-month deadline for its liquidation.
Official data revealed a decrease in the total assets of the funds by 510 billion liras (about 11 billion dollars), between the end of last August and the current September 18, as a result of investors withdrawing their funds massively.
The funds recorded outflows worth 411 billion Turkish liras, according to financial analysis platforms, affected by the increase in exit waves and the decline in market valuations for securities listed on the Istanbul Stock Exchange.
The authorities arrested 51 officials, executives and company owners, including a former vice president of the Central Bank, as part of investigations.
Anger from the opposition... and reassurance from the government
As investigations continued, the authorities lifted the freezing orders and asset bans imposed on 46 companies, 18 investment funds, and 42 individuals, while preventing 37 from traveling outside the country.
The Istanbul Public Prosecutor's Office said in a statement on Monday that the decision was taken following new evaluations and notifications from the Capital Markets Authority.
On Saturday, Justice Minister Akin Gorlik announced the freezing of the assets of these entities and individuals as part of investigations into manipulation of financial markets.
The New Party, the main opposition party, described the lifting of precautionary measures on companies, funds and individuals as a noticeable “coup” in the investigations, pointing out that among the companies from which these measures were lifted were the “Pacific” real estate company, owned by the husband of the parliamentary representative of the ruling “Justice and Development” Party in Ankara, Osman Erdogan, and the “IG Istash” company, the implementing contractor for the “Akkuyu Nuclear Power Plant” project in Mersin, in the south of the country.
On the other hand, Minister of Treasury and Finance, Mehmet Şimşek, stressed that protecting investment, employment, production and export capacity of the real sector is the government’s priority.
Shimsik said, in a statement through his account in “X”, “Legal measures are currently being taken against those involved in activities that disturb market balances, and no measures will be taken against individuals or companies not involved in these activities,” noting that his ministry is coordinating with the Ministry of Justice to ensure the legitimate rights of investors in the funds.
He stressed that the necessary measures will continue to be taken, especially with regard to the liquidity that the market needs, to prevent any developments from negatively affecting the financial system and the real economy.
Shimsik held two days of meetings, following his return from New York last Thursday, where he was part of the delegation accompanying Erdogan at the meetings of the 81st session of the United Nations General Assembly, with the institutions concerned regarding the liquidation of funds and the payment of investor dues to 7 investment portfolio management companies.
There were rumors of Shimsik’s resignation due to the fund crisis, but he denied this in a statement on his “X” account last Friday.
