👉️ NVIDIA Earnings Are Out: Find Out How One Of The Largest Companies In The World Performed in Q3 💰️ 

👉️ Share Buyback: How Do They Impact You As An Investor?

👉️ Beehiiv: Project Blackout - 20% OFF all Annual Plans. Your Chance To Start Your Own Newsletter

NVIDIA Earnings Are Out 💰️ 

Here are the numbers:

Revenue: $35.1B Vs. $33.2B expected (Beat ✅)

EPS: $0.81/share Vs. $0.74/share expected (Beat ✅)

Quarterly revenue was up 17% from Q2 and 94% year over year.

Jensen Huang, CEO and Founder of NVIDIA mentioned:

“The age of AI is in full steam, propelling a global shift to NVIDIA computing. Demand for Hopper and anticipation for Blackwell — in full production — are incredible as foundation model makers scale pretraining, post-training and inference. AI is transforming every industry, company and country. Enterprises are adopting agentic AI to revolutionize workflows. Industrial robotics investments are surging with breakthroughs in physical AI. And countries have awakened to the importance of developing their national AI and infrastructure”

Q4 2025 Outlook

Revenue: $37.5B expected

Gross margins: 73%

Operating expenses: $4.8B

For the full breakdown of NVIDIA’s earnings, along with access to our 2024 Stock Picks beating the market 91% of the time with a return of 31% in 5 months, click here to upgrade to premium

Note: the author of this post has a long position in NVIDIA. This post is for informational purposes only.

Share Buybacks

Imagine having a box full of your favourite chocolates.

Wouldn’t you want to maximize each piece’s value and make it memorable?

So you decide to take some pieces out of the box and eat them.

And as you have fewer chocolates, each remaining piece becomes a delightful treat that satisfies your cravings.

Companies do something similar.

But they have shares of their company instead of chocolates.

When a company buys back its own shares, it takes them out of the market.

Now, you’re probably asking…

Why would companies do something like this?

For two main reasons:

Reason #1: to make their shares more valuable for the shareholders who already own them. Like having fewer chocolates in the box, which makes each chocolate more special.

Reason #2: to prevent other people from getting too much control over their company... Like if you and your friends all have chocolate, but you don’t want one friend to have more chocolate than you.

Share buybacks have their pros and cons for investors.

1) Sweetening your experience as a shareholder.

Just like biting into delectable chocolate, share buybacks enhance the experience for shareholders.

When a company buys back its own shares, it reduces the number of outstanding shares available in the market.

This reduction increases the ownership stake of existing shareholders, giving them a larger piece of the cake.

As shareholders own a larger percentage, they will enjoy a greater share of the company's future profits and potential growth.

2) Savouring the sweetness of the company’s value.

Sometimes the market can undervalue a company's shares.

In such cases, companies may choose to engage in share buybacks.

This way, companies show their confidence that the market has undervalued their sweetness.

Investors see this as a positive sign, leading to an increase in the share price.

3) Delighting in improved financial ratios.

Imagine a box of chocolates with beautifully arranged layers.

Similarly, a company's financial ratios reflect its health and attractiveness to investors.

Share buybacks can be like cleaning up and refining those ratios.

When a company repurchases its shares, it reduces the number of shares available in the market.

As a result, the earnings per share (EPS) on the remaining shares increases, creating a more enticing treat for potential investors.

Improved financial ratios make the company more appealing to investors as they check its value and potential for growth.

But when it comes to share buybacks, just like a box of chocolates, there are a few that leave a sour taste in your mouth.

You can avoid those unpleasing pieces of chocolate, but you have to know which ones they are.

The 3 bitter flavours of share buybacks that kill your delightful experience while silently eroding your financial success:

1) Personal gain over company growth.

The executives delight in the exquisite chocolate, leaving you (as a shareholder) with a disappointing taste in your mouth.

Sometimes, buybacks focus on the self-interest of executives, benefiting their personal wealth. This slows (or even kills) long-term growth for the company.

The sourness of inequality leaves you feeling let down, while executives take advantage of your investments.

They’re basically stealing your hard-earned money.

2) Poor timing, like stale chocolates.

Have you ever bitten into chocolate, only to discover it's stale and has a hardened core?

That’s an awful experience. Which mirrors the consequences of poorly timed share buybacks.

Just like stale chocolate, mistimed buybacks fail to please your cravings, leaving you unsatisfied with your investment.

Sometimes, companies buy back their stock during market downturns.

Or when their stock becomes overvalued.

By doing so, they risk wasting resources, harming your shareholder value, and missing out on growth opportunities.

It's like biting into that stale chocolate and realizing you should have waited for a fresher, more rewarding treat.

3) Excessive leverage – the overly sweet chocolate.

Imagine picking up a chocolate that looks enticingly sweet, so you can delight your taste buds.

But as you take a bite, it overwhelms your taste buds with an excessive amount of sweetness.

Similarly, excessive leveraging from share buybacks negatively impacts the company's financial stability.

It's like indulging in that overly sweet chocolate only to experience a stomach-constricting squeeze.

Sometimes, companies are overly focused on buybacks, pushing their leverage to the max. This destroys their ability to invest in future growth, innovation, and needed capital expenditures.

Just like the sickening sweetness of that chocolate...

Too much focus on buybacks can create short-term gratification. Which will compromise the long-term stability and growth of the company.

While share buybacks can benefit you as an investor by increasing the value of your shares and potentially leading to higher dividend payments.

Share buybacks also cost opportunity, if funds aren't available for growing the company.

Consider the impact on your investment portfolio before making investment decisions.

Now, if you want to invest without feeling like you’re gambling…

And without the fear of losing all your hard-earned money…

Upgrade to Premium to gain access to our stock deep dives and 2024 Stock Picks.

Or you can keep losing time and money by playing around with risky investments.

The choice is yours.

Alex (The Dividend Dominator)
Founder and CEO of Dividend Domination Inc.
Follow me on Twitter, Instagram and LinkedIn

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