Seagate announced Thursday afternoon that its board of directors has authorized a plan to buy back $2.5 billion of the company’s common stock, increasing the company’s total current buyback authorization to $3.5 billion.

The buyback amount is equal to approximately 18% of Seagate’s market capitalization.

“The repurchase authorization reflects the confidence that the Board and the executive management team have in Seagate’s ability to generate cash, while still investing in innovation and growth opportunities,” Seagate CEO Steve Luczo said in statement. “Importantly, it supports and is consistent with our ongoing focus on returning value to our shareholders.”

In a release, Seagate said that it expects to fund the share repurchase through a combination of cash on hand, future cash flow from operations and potential alternative sources of financing.

Typically, publicly traded companies buy back shares when they have excess cash on hand and are confident that they can continue to generate an acceptable level of profit.