New Nvidia Price Target After $150 Billion Record Stock Buy
The elite-level AI chip firm announced a move that pushed Apple’s $110 billion buy into second place.
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“That’s not a knife. This is a knife.”
-Paul Hogan as Mick Dundee, “Crocodile Dundee” (1986)
That’s Not a Buyback
On Monday morning, elite-level AI chip designer Nvidia (NVDA) announced that the firm’s board of directors had authorized an additional $150 billion increase to its existing share repurchase program. Not only is this the largest-ever share buyback plan ever announced by a U.S. corporation, it brings that already mentioned existing authorization up to a whopping $235 billion (by January 2028). The old record was the $110 billion authorization announced by Apple (AAPL) in 2024.
It’s almost a matter of what to do with the cash available. Thanks to an incredible surge in AI-related capex spending that has only increased since exploding in 2022, Nvidia generated free cash flow of almost $100 billion for the fiscal year ended this past January. For the current fiscal year, as of July 26, the firm had generated free cash flow of just less than $69 billion through six months.
The firm’s balance sheet on that date showed a cash position of $99.4 billion and a debt load of just $33.4 billion. Through the first six months of the current fiscal year, Nvidia had posted a GAAP net income of $118 billion. up 161% annually from the same six-month period one year earlier.
CEO and founder Jensen Huang commented in Monday morning’s related press release:
“NVIDIA’s growth is being driven by a once-in-a-generation platform shift to AI and accelerated computing. Our cash generation gives us the capacity to invest in the technologies that advance this transformation and return capital to shareholders. This authorization reflects our confidence in the long-term opportunity ahead.”
But Wait, There’s More News
Earlier on Monday morning, Nvidia introduced the “Open Agent Safety Platform.” This will be an open software and reference system designed to improve AI security from agent testing through deployment. The platform will enable full-stack governance and control across software that runs agents, as well as the hardware and compute layers that power the work, and even the robotics systems that execute tasks in the physical world.
Security against the potential for AI to become self-aware and not only hack into places it should not go but actually compete against the human race has become a concern of late. With this new Open Agent Safety Platform, Nvidia is offering tools designed to help prevent such breaches while allowing the development to continue. Huang recently played down concerns that AI could eventually escape human control.
On the matter, Huang said, “AI’s extraordinary potential for society will only be realized if we solve AI safety. As we continue to discover the frontier of AI capabilities, we must accelerate discovery at the frontier of AI safety. Safety and security require full-stack engineering. NVIDIA Open Agent Safety Platform brings together industry, researchers and public-sector organizations to share best practices, align on evaluation methods and foster international cooperation. Together, we can raise the bar for global AI safety.”
It Should Be Noted…
A number of AI-focused and high-tech CEOs will be meeting with President Trump and House Speaker Mike Johnson to discuss AI, the latest developments and steps to be taken on Tuesday.
The Chart
Most readers likely already know that I remain long Nvidia, though I haven’t written on this name as often as I have on competitors such as Advanced Micro Devices (AMD) or Intel (INTC) where I have more exposure. Still, NVDA is a top -5 name in the Sarge-folio. Let’s take a look:
As I mentioned to Doug Kass’ crowd in his Diary last week, NVDA has continued to trade within the confines of my pitchfork model. Late last week, the stock found support at its 21-day EMA as swing traders suddenly showed more interest in the stock. We see that as the shares approach the central trendline of the pitchfork, it is now above all three key moving averages. This often forces increased participation among rules-based professionals.
Readers will also note that above the chart, relative strength is in a good spot, while also nowhere near entering into a technically overbought state. Below the chart, the daily MACD is set up about as bullishly as it gets. The histogram of the nine-day EMA is in positive territory as are the 12-day EMA and 26-day EMA with the 12-day line pulling away.
Nvidia (NVDA)
Target Price: $300 (up from $290)
Pivot: central trendline (currently $235)
Add: down to 50-day SMA (currently $216)
Panic: Loss of 50-day SMA
At the time of publication, Guilfoyle was long NVDA, AMD and INTC equity.
