Opinion: Nvidia's $50 Billion Buyback Is Not a Reason to Buy the Stock Hand Over Fist. Here's What I'm Concerned About.
On Aug. 28, Wall Street held its breath as the world's most important artificial intelligence (AI) company reported second-quarter earnings. I'm talking about Nvidia (NASDAQ: NVDA), of course. While each member of the "Magnificent Seven" is seen as an indicator for the direction of all things AI, Nvidia has emerged as perhaps the industry's end-all-be-all barometer.
But fear not! Once again, Nvidia silenced the doubters after posting yet another spectacular earnings report. However, while combing through the financial and operating metrics, I discovered one announcement that left me a little perplexed.
Namely, Nvidia's board of directors approved an additional $50 billion in share repurchases (this comes on top of a remaining $7.5 billion from a prior buyback program). There's a general notion that stock buybacks can be quite favorable for investors. But in the case of Nvidia, I just don't get it.
Source Fool.com
