Cramer Wants Nvidia to Buy Back a Tenth of Itself but One Analyst Expects the Stock To Hit $400 Without It
Jim Cramer and a top Wall Street analyst both see Nvidia as mispriced, but their prescriptions could not be further apart, and only one of them has the earnings to back it up.
Two CNBC voices looked at the same stock inside the same 12-hour window and reached opposite conclusions about what it needs. Jim Cramer wants NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) to launch a buyback roughly equal to a tenth of its market value to fix what he sees as broken price discovery. New Street Research’s Pierre Ferragu says the earnings will do the work themselves.
Ferragu’s $400 Call, No Corporate Action Required
Speaking Tuesday morning, Ferragu described a $400 stock price as “very, very, very likely” within 18 months, driven by earnings power alone. Speaking on CNBC’s Squawk Box, he challenged the notion that NVIDIA has grown too large to deliver outsized returns, arguing that the market has yet to fully price in the scale of global AI adoption and the company’s ability to generate cash. He cited Jensen Huang’s guidance for at least 70% business growth next year and framed NVIDIA as operating in “halcyon days” with no visible cycle top. His valuation argument leans on multiple compression: NVIDIA, he argues, is trading on “single-digit earnings multiple on 2028 earnings,” a forward earnings base most investors have not yet repriced.
From the September 1 close of $217.44, a move to $400 originally implied roughly 84% upside. With NVDA now trading closer to $234, the path to $400 still implies roughly 71% upside and a market cap approaching $10 trillion. For context, NVIDIA shares have been trading at about 16.5 times 12-month forward earnings, their lowest multiple since January 2015 and well below the 15-year average of 30x, which some analysts see as a sign of slowing profit-growth expectations.
Cramer’s Half-Trillion-Dollar Prescription
Cramer’s remedy is louder. He wants NVIDIA to buy back roughly a tenth of itself, which against NVIDIA’s current market cap of roughly $5.7 trillion pencils out to more than $500 billion. When this article first published, NVIDIA’s board had authorized $80 billion in additional repurchase capacity on May 18, 2026, leaving approximately $99 billion remaining at quarter end, a fraction of what Cramer was calling for.
That math changed materially on September 28, 2026. NVIDIA boosted its buyback authorization by a record $150 billion, increasing the total remaining amount authorized to $235 billion. The company plans to complete the buyback through fiscal 2028. Nvidia’s $150 billion increase alone exceeds the market capitalization of about 84% of S&P 500 constituents, according to LSEG data. Even at that scale, the program still falls short of a full tenth of NVIDIA’s current market cap. Cramer, who had recently disclosed his highest cash position in 25 years, had called for what would have been the largest corporate repurchase in history. The company has since delivered something close to it.
NVIDIA has been actively returning capital beyond the headline buyback. Management said it returned “$26 billion to shareholders” in the latest quarter, comprising “$20 billion through share repurchases” and “$6 billion through our quarterly dividend of $0.25 per share.”
Why the Fundamentals Favor Ferragu
Q2 FY27 revenue reached $96.22 billion, up 105.8% year over year, with Data Center revenue of $89.02 billion. Non-GAAP EPS came in at $2.22, the fifth consecutive beat. Management guided for approximately $108 billion in revenue for Q3, plus or minus 2%. Huang told analysts that “AI is now doing productive and useful work” and “AI is generating profitable tokens.” Consensus already reflects the acceleration: analysts model FY2028 EPS of $13.13 on revenue of $573.6 billion. At those earnings, a $400 share price requires a forward multiple in the low 30s, roughly in line with where the stock has historically traded.
Ferragu expects NVIDIA to deliver a solid beat in 2026 and an even stronger one in 2027, with his model pointing to NVIDIA becoming a $1 trillion revenue company by the end of 2027 — roughly double the current consensus estimate. The full-chain put/call ratio of 0.48 shows options traders are positioned in Ferragu’s direction. Cramer’s buyback demand made headlines. On September 28, the company answered in kind. Ferragu’s math, though, is still the argument that compounds.
Editor’s note: This article was updated to reflect NVIDIA’s September 28, 2026 announcement of a record $150 billion buyback increase, bringing total remaining repurchase authorization to $235 billion through fiscal 2028, as well as the current NVDA share price of approximately $234 and revised implied upside of roughly 71% to Ferragu’s $400 target. The forward earnings multiple referenced in the fundamentals section was also updated to reflect Reuters-cited data showing NVDA trading at approximately 16.5 times forward earnings, a decade-plus low.
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After two decades of patrolling the dark corners of suburbia as a police officer, Rich Duprey hung up his badge and gun to begin writing full time about stocks and investing. For the past 20 years, he’s been cruising the markets looking for companies to lock up as long-term holdings in a portfolio while writing extensively on the broad sectors of consumer goods, technology, and industrials. Because his experience isn’t from the typical financial analyst track, Rich is able to break down complex topics into understandable and useful action points for the average investor. His writings have appeared on The Motley Fool, InvestorPlace, Yahoo! Finance, Money Morning, and, of course, 24/7 Wall St. He has been featured in both U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, and USA Today.
