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Nvidia CEO Jensen Huang is backing his bullish words with corporate cash. The chipmaker on Monday authorized an additional $150 billion for share repurchases, a record move announced while one important valuation measure placed the stock at its cheapest level in a decade.

Huang had already made his view plain in comments to CNBC’s Jim Cramer last month. “Buying back Nvidia stock is a tremendous opportunity.”

Nvidia’s price to earnings ratio for fiscal 2028, which begins this coming February, stands at 14.5. That is below every megacap peer cited in the comparison except Micron, while Nvidia’s average current P/E ratio over the past five years is 62.9, more than double its current level.

The compressed multiple surrounds the world’s most valuable company, which is now valued at more than $5.5 trillion. Nvidia shares have gained 23% this year and outperformed the Nasdaq, but the stock has not kept pace with expected earnings growth.

Analysts on average expect Nvidia to generate net income of nearly $385 billion in fiscal 2028. That would represent a 60% increase from the prior year and growth of more than fivefold across a three year period.

The new $150 billion authorization comes on top of an $80 billion repurchase plan announced in May. At that time, Nvidia also raised its quarterly cash dividend to 25 cents per share from 1 cent.

Karan Ramchandani, managing director at Post Oak Group, called the latest authorization a “clear-cut message” that Nvidia’s management considers the shares undervalued. “If you look at the P/E ratio, the earnings are are scaling up faster than the share price,” Ramchandani said.

Ramchandani described the repurchase decision as evidence that management views Nvidia shares as an attractive use of company capital. “It’s a very healthy mark of a company looking at their own stock buybacks as the best investment they could do in the coming year.”

Nvidia’s stock rose almost 2% on Monday, when the company also introduced new hardware and software solutions for controlling AI agents. The larger capital return plan arrives as demand for Nvidia graphics processing units drives rapid growth in revenue and cash flow.

The company has signaled that its expansion could continue through early 2028. Nvidia told investors in August that it expects 70% sales growth in fiscal 2028, implying hundreds of billions of dollars more in sales than Wall Street had previously forecast.

At a Goldman Sachs conference earlier this month, Huang said Nvidia was “misunderstood” and suggested its growth and future earnings justified a richer valuation. “We are the world’s first and only growth value stock,” Huang said. “People are trying to figure out which one we are. We are both.”

Nvidia previously said it planned to return roughly half of its free cash flow to investors through share repurchases and buybacks. The company’s share count could fall 4% if the chipmaker spends its entire current authorization.

“We’re going to generate a lot of cash in the coming years,” Huang said on CNBC’s “Squawk Box” on Monday. “As we generate more cash, we’d like to be able to return it back to shareholders.”

Gene Munster, managing partner at Deepwater Asset Management, said investors appear concerned that Nvidia’s growth rates will slow after several enormous years. “It’s just really hard for investors to get comfortable that that’s going to continue,” Munster told CNBC’s “Fast Money” on Monday.

Munster identified the expected deceleration as the reason for Nvidia’s compressed multiple. “That downward slope of growth rate, that’s the reason why it trades at that compressed multiple.”

Nvidia’s fiscal 2028 P/E ratio trails Apple at 35.5, Alphabet at 22.6, Microsoft at 21.7 and Amazon at 23.2 for a similar period. It is also lower than AI data center chip rivals Broadcom at 18.2, Advanced Micro Devices at 38.2 and Intel at 54.7, none of which forecasts 70% sales growth next year.

Ben Reitzes, an analyst at Melius Research with a buy recommendation on Nvidia, said the stock “deserves to be higher given its growth rate.” UBS analysts separately estimated that larger repurchases could add 8 cents per share to Nvidia’s calendar year 2027 earnings, which they estimate at $17.16.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.