HSBC analysts expect share repurchases to remain a significant feature of capital allocation among the so-called “Magnificent Seven,” highlighting medium-term opportunities at NVIDIA.
In a report on the tech giants’ use of cash, HSBC said: “Capex is the largest Mag 7 capital allocation pod (45%, 2025 HSBCe at USD414bn), outpacing share buybacks since 2024 due to the surge in AI-related investment. Still, we make the point that buybacks represent a significant portion of allocation (26%, USD236bn in 2025e), well above share-based compensation (USD88bn).”
NVIDIA, which recently launched a repurchase programme, is seen by HSBC as particularly well placed to expand it.
“NVIDIA, which recently introduced a buyback program, could increase the same to prevent its cash pile to reach USD500bn in 2028 without further action,” the analysts wrote.
The bank contrasted strategies across the group. “Amazon, Microsoft, and Tesla focus on capex, Apple and NVIDIA on share buybacks, and Alphabet (not rated) and Meta on a mix of capex and buybacks,” HSBC said.
While Apple may need to divert more cash to AI investment, the bank said NVIDIA could step up repurchases as a means of balancing its capital position.
HSBC retained Buy ratings on Microsoft, Meta, and Amazon, a Hold on both Apple and NVIDIA, and a Reduce on Tesla.
It added that “some of the Mag 7 could reconsider allocation” as the higher total addressable market in AI, cloud and EVs continues to support strong cash generation.
Source :
https://www.investing.com/news/stock-market-news/hsbc-sees-mediumterm-opportunities-for-share-buyback-at-nvidia-4231589
