Cramer Warns Nvidia Buyback Plan May Be 'Expensive Illusion' Without Maestri Strategy

Nvidia's record-breaking $150 billion share repurchase authorization has left Jim Cramer skeptical unless management follows a specific playbook. According to Cramer, the key to making this authorization meaningful is for Nvidia to adopt the same approach as Apple's former CFO, Luca Maestri.

Maestri's method involves buying shares every quarter and increasing purchases when the stock price drops. This strategy allows for steady retirement of shares, which in turn raises per-share earnings faster than net income.

Nvidia has the resources to implement this plan, having produced $21.34 billion in free cash flow in its second fiscal quarter 2027 and returned $26 billion to shareholders, including $20 billion in buybacks.

Cramer believes that if Nvidia adopts Maestri's approach, the company can create a software moat by making permission controls the default layer in CUDA deployments. This would set it apart from competitors and provide a significant competitive advantage.