nVidia is a bit outside my wheelhouse, especially because of its fundamentals. But I could not help but be compelled to read Barrons article about nVidia buybacks.
In summary last week it announced plans for $25B in buybacks over the next year, after $3.3B in buybacks last quarter. Currently nVidia is trading at 115 times earnings, and nearly 40 times sales. nVidia is an extraordinary company worth a very high multiple, but I have doubts that any business is ever worth a three figure PE ratio, or more than 20 times sales.
I have one word of advice to nVidia CEO Jenson Huang, “dividends”. Buying back shares at well over intrinsic value is bad capital allocation, its only possible benefit is to help temporarily maintain a stratospheric stock price for still vesting insiders. But maybe he already knows that?