Nvidia’s stock is failing to reflect its “extraordinary growth and profitability,” and the chipmaker should drastically ramp up its share buybacks to address this disconnect, according to Jim Cramer.
The “Mad Money” host argued that Nvidia’s current stock performance isn’t adequately rewarding its exceptional business expansion and robust profitability. “I think, from Nvidia’s perspective, there’s nothing more valuable in this market than Nvidia,” Cramer stated.
Nvidia has indeed been increasing its share repurchase programs. In May, the company’s board authorized an additional $80 billion in buybacks, with no expiration date, augmenting any remaining balance from previous authorizations. In the first two quarters of fiscal year 2027, Nvidia repurchased nearly $40 billion worth of stock, a figure nearly matching its total buybacks for all of fiscal year 2026, which stood at approximately $34 billion.
“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 noted on the company’s recent earnings call. “And going forward, we intend to increase and return excess free cash flow net of strategic uses.”
While Kress’s commentary indicates a positive trend, Cramer believes Nvidia needs to go much further. He proposed a buyback authorization of “a monster half trillion dollar” and an aggressive, daily repurchase strategy, especially during market downturns.
Despite Nvidia’s consistently strong revenue growth projections, with an outlook for roughly 70% in fiscal 2028 compared to an expected 45%, its stock has seen a muted reaction. Since its October 2025 GTC conference, the stock has only appreciated about 8%, lagging the S&P 500’s approximately 11% gain over the same period. “Whatever Nvidia’s doing, it simply is not being rewarded by Wall Street,” Cramer observed.
One factor contributing to this market skepticism, Cramer suggested, might be Nvidia’s increasingly complex role in financing the burgeoning AI infrastructure. Recent deals, such as Anthropic’s data-center agreement with Nvidia-backed cloud provider Lambda and Nvidia’s financial support for other large AI projects, have raised concerns about “circular financing.” This practice, where a company provides financial backing to customers who then purchase its products, has drawn comparisons to financing tactics during the dot-com bubble, leading critics to worry about artificially inflated demand.
Cramer, however, countered these concerns by highlighting Nvidia’s unique advantage over traditional lenders: its GPUs retain significant value and can be redeployed if a customer faces financial difficulties. “Worst case scenario, they repossess the GPUs, maybe even at the price they sold them for,” he posited.
Still, Cramer reiterated his conviction that Nvidia could allocate more capital towards an investment that Wall Street would readily embrace – its own stock. He cited Apple as a prime example, which spent years aggressively repurchasing shares when management perceived them as undervalued. These buybacks significantly reduced Apple’s outstanding share count by roughly 40% during Tim Cook’s tenure, thereby increasing the ownership stake for remaining shareholders. Apple reportedly bought back over $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 concluded.
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