Nvidia's Cramer-Approved Buyback Plan Seeks to Close Valuation Gap

Nvidia's valuation is drawing attention from Jim Cramer, who believes the company's price is absurd. The stock trades at 23 times earnings estimates for this year, despite expected growth of around 70% in fiscal 2028.

Cramer wants Nvidia to announce a half-trillion-dollar buyback, roughly a tenth of the company's market value. He argues that management should respond with the largest share repurchase in corporate history due to the valuation gap.

Nvidia generates $21 billion in quarterly free cash flow at a low-twenties forward multiple, priced as if a demand shock is coming. However, Cramer disagrees, pointing out that the company has an amazing order book and huge profitability.