How Nvidia Could Make $150 Billion Look Small
Nvidia announced its largest share repurchase authorization in the market’s history, but does it really matter to a $5 trillion company?
Nvidia's $150 billion share repurchase agreement has generated much discussion among investors. This move, hailed as the biggest in history, gives the board approximately $250 billion to buy back shares. However, analysts Tyler Crowe, Lou Whiteman, and Rachel Warren argue that this amount is not significant enough for such a large and successful company.
Whiteman finds the buyback to be "thrown out of proportion," while Warren notes that it's only around 2% of Nvidia's market cap. Crowe goes even further, stating that the buyback should be at least 5% of the market cap, given the company's free cash flow of $134 billion. One potential reason behind this seemingly modest buyback could be Nvidia's attempt to address concerns over AI safety and security.
They are introducing an open-source framework called OpenShell and a hardware watchdog called Sentry to help quarantine rogue software within milliseconds. However, the company has run out of ways to excite investors lately, and this move might be seen as a desperate attempt to regain their attention.
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