Nvidia's Stock Price Hike: Cramer vs. Analyst's Earnings-Driven Forecast
Nvidia (NVDA | NVDA Price Prediction) has been under scrutiny from two prominent voices in the financial world. CNBC's Jim Cramer and New Street Research's Pierre Ferragu have differing opinions on how to fix what they see as a mispriced stock.
Cramer wants Nvidia to launch a buyback equal to a tenth of its market value, roughly $500 billion, to address broken price discovery. However, Ferragu believes earnings will drive the stock up without any corporate action being necessary.
Ferragu's prediction is for a $400 stock price within 18 months, citing Jensen Huang's guidance for at least 70% business growth next year and Nvidia's current valuation as operating in 'halcyon days' with no visible cycle top. He argues that Nvidia is trading at single-digit earnings multiples against a forward earnings base that investors have not fully repriced.
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. However, Ferragu's math is backed by Nvidia's recent earnings, which showed Q2 FY27 revenue reaching $96.22 billion, up 105.8% year over year.