Nvidia Prepares for Aggressive Share Buybacks Amid $1 Trillion Market Value Wipeout

Nvidia's stock has lost nearly $1 trillion in market value since its record high on May 14, making it one of the most significant declines in recent memory. The company's shares are now trading at around 18 times forward earnings, lower than the S&P 500's multiple of 21 times.

This is the cheapest Nvidia stock has been since early 2019, before the AI boom began to take shape. At that time, the tech company was seen as a play on video game chips and bitcoin mining.

Nvidia's CEO Jensen Huang has not commented directly on the recent sell-off, but analysts believe the company may be poised to aggressively increase its share buybacks in response to the weakness in its stock price. In May, Nvidia announced an expanded capital return program, which includes a new $80 billion stock buyback plan in addition to its existing $39 billion program.

Citi analyst Atif Malik has expressed optimism about Nvidia's prospects, citing strong access to DRAM memory and constrained industry supply as key drivers of the company's success. Malik maintains Nvidia as his top buy-rated mega-cap data center semi-conductor pick.