Nvidia (NASDAQ: NVDA) stock briefly flipped a crucial resistance level on Friday, reaching a record high of $237 before pulling back to close the week at $233. The move was driven by a rotation back toward artificial intelligence companies and a weak nonfarm payrolls report that reduced the likelihood of Federal Reserve interest rate hikes.
The company announced a significant expansion to its share repurchase program, authorizing the repurchase of shares worth $150 billion. This addition brings the total authorized buyback to $230 billion, on top of the existing $80 billion program. The company noted that its outstanding shares have already dropped to 24.15 billion from over 25 billion in 2022.
Investors are turning their attention to the upcoming earnings season for clues on data center spending. The next major catalyst for Nvidia will be its GPU Technology Conference (GTC), scheduled for later this month, which typically sets the tone for the AI infrastructure industry.
Analysts project continued strong revenue growth, with average estimates forecasting a 90% increase this year to $411 billion, followed by a 70% jump next year. Despite this growth, the company is trading at an attractive valuation, with a forward price-to-earnings ratio of 24 compared to a five-year average of 42. Similarly, the forward PEG ratio is 0.24, lower than the five-year average of 1.3.
Market participants are also watching Nvidia’s top clients, including Microsoft, Meta Platforms, Amazon, and Alphabet, which account for over 40% of the company's total revenue. These companies, along with suppliers like SK Hynix and Taiwan Semiconductor Manufacturing, are set to release their earnings this month.
