Analysts Clash Over Nvidia Valuation and Buyback Strategy

Financial analysts are divided over the future valuation of Nvidia Inc. following the company's Q2 FY27 earnings report. The company reported revenue of $96.22 billion, representing a 105.8% year-over-year increase, and returned $26 billion to shareholders through dividends and repurchases during the quarter.

Jim Cramer argues the stock is currently mispriced and suggests the company launch a massive share buyback program totaling roughly a tenth of its market value, which would exceed $500 billion. Conversely, Pierre Ferragu of New Street Research predicts the stock will reach $400 within 18 months based on earnings power alone.

Ferragu's optimistic outlook relies on guidance from CEO Jensen Huang, who projected at least 70% business growth for next year. Huang has characterized the current state of the industry by stating that AI is now performing productive work and generating profitable tokens.