Key Points
- CNBC’s Jim Cramer said Nvidia should dramatically increase its stock buyback, arguing the chipmaker’s extraordinary growth and profitability aren’t being fully reflected in its share price.
- He pointed to the success of Apple’s massive buybacks and said Nvidia should consider a buyback as large as $1 trillion.
CNBC’s Jim Cramer said Monday that Nvidia should dramatically increase its stock buyback, arguing that shares aren’t getting enough credit for the company’s extraordinary business growth. “I think, from Nvidia’s perspective, there’s nothing more valuable in this market than Nvidia,” the ” Mad Money ” host said. To be fair, Nvidia has already been stepping up its buybacks. Back in May, Nvidia’s board approved an additional $80 billion in share repurchases with no expiration date. That is on top of what was left in the prior authorization. In the first two quarters of fiscal year 2027, Nvidia bought back nearly $40 billion of stock, according to FactSet, an amount almost on par with all of fiscal 2026. Nvidia repurchased roughly $34 billion in fiscal 2025. “Relative to our plan to return 50% or more of free cash flow, we returned 60% on a year-to-date basis,” Nvidia CFO Colette Kress said on last week’s earnings call. “And going forward, we intend to increase and return excess free cash flow net of strategic uses.” Cramer said the ramp-up is encouraging, but the company should go much further because of the growing disconnect between Nvidia’s fundamentals and its stock performance. “I’d quintuple the buyback authorization – announce a monster half trillion dollar buyback and repurchase a tenth of the company in a fairly aggressive fashion, every day, clockwork, and get bigger on the down days,” he said. Since the company’s October 2025 GTC conference in Washington, D.C., the chipmaker has repeatedly increased its visibility into future demand , culminating in last Wednesday’s outlook for roughly 70% revenue growth in fiscal 2028 versus the roughly 45% expected. Yet Nvidia shares have already given back much of their post-earnings gains and are up just 8% since that Oct. 28, 2025 event, trailing the S & P 500’s roughly 11% advance. “Whatever Nvidia’s doing, it simply is not being rewarded by Wall Street,” Cramer said. Part of the problem, he argued, may be Nvidia’s increasingly complex role in financing the AI infrastructure buildout . On Tuesday, Anthropic announced a data-center deal with Nvidia-backed cloud provider Lambda for a facility being developed by Hut 8 , another company Nvidia is supporting. The chipmaker has also provided financial backstops for other massive AI projects as it uses its balance sheet to help customers fund purchases of computing infrastructure. Those arrangements have fueled concerns about so-called circular financing , in which a company provides financial support to customers that then spend money on its products. Critics worry such deals can artificially bolster demand and have drawn comparisons to financing practices during the dot-com bubble. Cramer pushed back on those concerns, arguing Nvidia has an advantage traditional lenders don’t: its GPUs retain their value and can be redeployed if a customer runs into trouble. “Worst case scenario, they repossess the GPUs, maybe even at the price they sold them for,” he said. Still, Cramer said Nvidia could put more of its capital toward an investment Wall Street would have an easier time appreciating — its own stock. He pointed to the success of Apple , which spent years aggressively repurchasing its own shares when management believed the stock was undervalued. Those buybacks ultimately reduced Apple ‘s share count by roughly 40% during Tim Cook’s tenure. Buybacks increase the ownership stake of the remaining shareholders. According to FactSet, Apple bought back more than $800 billion worth of stock during Cook’s 15 years as CEO. “That’s why they should do like Apple, which also was valued incorrectly, and repurchase a spectacular amount of stock,” Cramer said. Cramer’s Charitable Trust , the portfolio run by CNBC’s Investing Club, owns shares of Apple and Nvidia. Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market. Disclaimer Questions for Cramer? Call Cramer: 1-800-743-CNBC Want to take a deep dive into Cramer’s world? Hit him up! Mad Money Twitter – Jim Cramer Twitter – Facebook – Instagram Questions, comments, suggestions for the “Mad Money” website? madcap@cnbc.com