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.
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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 said a $400 stock price is “very, very, very likely” within 18 months, driven by earnings power alone. 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 at “single digit earnings multiples” against a forward earnings base most investors have not fully repriced.
From the September 1 close of $217.44, a move to $400 implies roughly 84% upside and a market cap approaching $10 trillion. The stock traded at $226.67 on Wednesday morning.
Cramer’s Half-Trillion-Dollar Prescription
Cramer’s remedy is louder. He wants NVIDIA to buy back roughly a tenth of itself, which against a $5.46 trillion market cap pencils out to more than $500 billion. NVIDIA’s board authorized $80 billion in additional repurchase capacity on May 18, 2026, leaving approximately $99 billion remaining at quarter end. That is a fraction of what Cramer is asking for.
Cramer recently disclosed his highest cash position in 25 years, then prescribed the largest corporate repurchase in history to lift a stock he says is mispriced. NVIDIA has been actively returning capital. 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. 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 13.1277 on revenue of $573.6 billion. At those earnings, a $400 share price requires a forward multiple in the low 30s, roughly where the stock trades now.
The full-chain put/call ratio of 0.48 shows options traders are positioned in Ferragu’s direction. Cramer’s buyback demand may make headlines. Ferragu’s math is the one that would compound.
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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, and Money Morning. He has been featured in both U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, and USA Today.
