Nvidia's Cash Surplus: $270 Billion in Three Years and Potential Shareholder Returns

Santa Clara, California United States of America
CEO Jensen Huang expressed confidence in Nvidia's continued success and set a price target of $160 on Nvidia stock
Net cash provided by operating activities soared to $28.1 billion in FY 2023-24 from $5.6 billion in the prior year
Nvidia is predicted to generate $270 billion in cash over the next three years
Nvidia remains one of the best ways for investors to expose their portfolios to AI, a market forecasted to grow by 36% annually through 2030
Nvidia's unique 'full stack' approach combines hardware and software, giving it an advantage in the AI space
Nvidia's Cash Surplus: $270 Billion in Three Years and Potential Shareholder Returns

Nvidia, a leading AI chip company, is predicted to have an abundance of financial success in the coming years. With its unique 'full stack' approach that combines hardware and software, Nvidia has gained a significant advantage in the booming AI space. Tech analyst Ben Reitzes of Melius Research believes that Nvidia will generate $270 billion in cash over the next three years, potentially leading to huge returns for shareholders.

Despite not being eager to discuss potential stock buybacks, Reitzes suggests that Nvidia's cash surplus will have nowhere else to go but towards shareholders as it cannot invest heavily in R&D or make large purchases. Nvidia has already returned capital to shareholders through a $25 billion repurchase program and a boosted quarterly cash dividend.

Nvidia's annual cadence of innovating new products allows developers and customers to anticipate upgrades and budget accordingly, giving the company an edge over rivals. The recent financials show that Nvidia's ability to generate cash is accelerating, with net cash provided by operating activities soaring to $28.1 billion in the fiscal year that ended in January from $5.6 billion in the prior year.

Despite ongoing selloffs and concerns about competitors building custom AI chips, history suggests they will need a comparable software ecosystem to displace Nvidia. Nvidia remains one of the best ways for investors to expose their portfolios to AI, a market forecasted to grow by 36% annually through 2030.

Nvidia's CEO, Jensen Huang, has also expressed confidence in the company's continued success. At the annual shareholder meeting on Wednesday, he stated that Nvidia will remain the gold standard for AI training chips amid concerns about rivals cutting into his market share. The rollout of Nvidia's Blackwell system later this year is expected to cement its lead.

Reitzes has set a price target of $160 on Nvidia stock, implying a 30% gain from Friday's closing price.


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Confidence

96%

Doubts
  • Are there any significant risks to Nvidia's market dominance in the AI space?
  • Is Nvidia's financial success sustainable in the long term?

Sources

95%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Nvidia shares are rebounding. Here are the top analyst calls on the chipmaker this week

CNBC News Katrina Bishop Thursday, 04 July 2024 23:17
  • Unique Points
    • ]Nvidia shares are rebounding[
    • Nvidia is a leading AI chip company
    • Tech analyst Ben Reitzes of Melius Research claims that Nvidia has a ‘full stack’ approach with its hardware and software, giving it a significant advantage in AI.
    • Reitzes has set a price target of $160 on Nvidia stock, implying a 30% gain from Friday’s closing price.
    • Nvidia's annual cadence of innovating new products allows developers and customers to anticipate upgrades and budget accordingly, giving the company an edge over rivals.
    • Melius Research projects that Nvidia will generate $270 billion in cash over the next three years, potentially leading to significant returns for shareholders.
  • Accuracy
    No Contradictions at Time Of Publication
  • Deception (100%)
    None Found At Time Of Publication
  • Fallacies (100%)
    None Found At Time Of Publication
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (100%)
    None Found At Time Of Publication

100%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Nvidia Completed Its 10-for-1 Stock Split in June. Here's How High the AI Stock Could Soar, According to Wall Street

The Motley Fool Trevor Jennewine Thursday, 04 July 2024 08:12
  • Unique Points
    • Nvidia delivered monster returns over the last 18 months, advancing 740% due to enthusiasm about artificial intelligence.
    • Nvidia accounts for roughly one-fifth of the gains in the S&P 500 during the last 18 months.
    • Nvidia introduced CUDA programming model in 2006, which allows its GPUs to function as general purpose data center processors.
    • Nvidia reported exceptional financial results in the first quarter of fiscal 2025 with revenue increasing 262% and non-GAAP net income surging 462%.
    • Competitors are building custom AI chips but history suggests they will need a comparable software ecosystem to displace Nvidia.
    • Nvidia remains one of the best ways for investors to expose their portfolios to AI, a market forecasted to grow by 36% annually through 2030.
  • Accuracy
    No Contradictions at Time Of Publication
  • Deception (100%)
    None Found At Time Of Publication
  • Fallacies (100%)
    None Found At Time Of Publication
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (100%)
    None Found At Time Of Publication

100%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Nvidia will produce such a massive ‘cash gusher’ that it will have to buy back more stock because all that money has nowhere else to go, analyst says

Fortune Media Inc. Jason Ma Saturday, 29 June 2024 00:00
  • Unique Points
    • >$270 billion in cash projected for Nvidia over the next three years
    • >150% increase in quarterly cash dividend from $0.04 to $0.10 per share in Q4 of 2023
    • >$25 billion repurchase program announced by Nvidia in August, 2023
    • Nvidia will remain the gold standard for AI training chips with the rollout of Blackwell system later this year
  • Accuracy
    No Contradictions at Time Of Publication
  • Deception (100%)
    None Found At Time Of Publication
  • Fallacies (100%)
    None Found At Time Of Publication
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (100%)
    None Found At Time Of Publication

95%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Nvidia will produce such a massive ‘cash gusher’ that it will have to buy back more stock because all that money has nowhere else to go, analyst says

Yahoo Finance Jason Ma Friday, 05 July 2024 07:40
  • Unique Points
    • AI chip leader Nvidia is predicted to have an abundance of financial success in the coming years, with shareholders set to benefit.
    • Tech analyst Ben Reitzes of Melius Research claims that Nvidia has a 'full stack' approach with its hardware and software, giving it a significant advantage in AI.
    • Nvidia's shares have soared 150% so far this year after more than tripling in 2023.
    • Among the 'Magnificent 7' stocks that Reitzes covers, Nvidia has the most potential for growth ahead.
    • Nvidia's annual cadence of innovating new products allows developers and customers to anticipate upgrades and budget accordingly, giving the company an edge over rivals.
    • Melius Research projects that Nvidia will generate $270 billion in cash over the next three years, potentially leading to significant returns for shareholders.
    • Despite not being eager to discuss potential stock buybacks, Reitzes believes that Nvidia's cash surplus will have nowhere else to go but towards shareholders as it cannot invest heavily in R&D or make large purchases.
    • Nvidia has already returned capital to shareholders through a $25 billion repurchase program and a boosted quarterly cash dividend.
    • Nvidia's ability to generate cash is accelerating, with net cash provided by operating activities soaring to $28.1 billion in the fiscal year that ended in January from $5.6 billion in the prior year.
    • In the first quarter that ended in April, Nvidia had already achieved more than half of last year's total net cash provided by operating activities at $15.3 billion.
  • Accuracy
    No Contradictions at Time Of Publication
  • Deception (80%)
    The author makes several statements that imply a strong positive opinion about Nvidia and its future prospects. While this in itself is not deceptive, the author's use of language such as 'embarrassment of riches', 'cash gusher', and 'huge shareholder returns' can be seen as emotionally manipulative and sensationalist. The author also selectively reports information by focusing on Nvidia's financial successes without mentioning any potential challenges or competitors. Additionally, the author makes a prediction about future stock buybacks without disclosing that Nvidia has already announced a $25 billion repurchase program and increased its dividend.
    • Given Nvidia’s edge in the booming AI space, Melius Research projects the company will generate $270 billion in cash over the next three years, potentially setting the stage for huge shareholder returns.
    • What they did is they built a computing language and an ecosystem that allows you to monetize AI, and obviously they’re killing it.
    • No one’s talking about it, and when you do the model we do, it’s a cash gusher.
    • Despite an ongoing selloff that began earlier this month, shares have soared 150% so far this year after more than tripling in 2023.
    • Another big advantage Nvidia has over rivals is its annual cadence of innovating new products.
    • It’s not an insult to buy back stocks if you have nothing else to do.
  • Fallacies (95%)
    The author makes an appeal to authority by quoting Ben Reitzes, a tech analyst, multiple times about Nvidia's potential for generating cash and having an advantage in AI. However, no formal or informal fallacies were found beyond this.
    • Ben Reitzes, a managing director and head of technology research at Melius Research, told CNBC on Wednesday that Jensen Huang's Nvidia has mastered a 'full stack' approach with its hardware and software, giving it a key advantage in AI.
    • Reitzes has a price target of $160 on Nvidia stock, implying a 30% gain from Friday’s closing price.
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (100%)
    None Found At Time Of Publication