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Nvidia stock has moved sideways in the past few days, with its attempts of moving to its all-time high facing some substantial resistance. This wavering continued even as the company announced a $150 billion share buyback. A key concern is that top AI companies are burning cash, reigniting AI bubble fears.
Nvidia Stock Wavers Despite Massive Buyback Plan
NVDA stock has remained under pressure, even as the company announced a large share buyback plan. In a statement, management said it will spend an additional $150 billion on share repurchases. In a previous statement during the first-quarter earnings, the management unveiled a $80 billion share buyback plan.
Share buybacks are usually bullish because they help to reduce the number of outstanding shares. Indeed, historical data shows that the company’s outstanding shares have dropped to 24.15 billion from over 25 billion in 2022.
The company is boosting its buybacks due to the windfall it has received during the ongoing AI boom. Also, it believes its stock is highly undervalued, with the forward price-to-earnings ratio at 20, well below its historical levels. Its Rule-of-40 multiple is also significantly higher, given the company’s revenue growth of over 100% and a profit margin of 55%.
Anthropic IPO Prospectus Shows Massive Cash Burn
Nvidia stock has wavered because of the leaked Anthropic IPO prospectus, which showed that the company’s cash burn was continuing. It showed that its revenue jumped 12-fold in 2025 to nearly $4.6 billion. Despite this, the firm lost $8 billion on operating basis and a net loss of $42 billion.
Anthropic’s revenue growth has continued this year, helped by the advanced models that have made it a bigger competitor to OpenAI. Despite all this, the firm has made some big spending commitments. It inked a $45 billion deal with Nscale, a company that Nvidia has backed. It also announced a $200 billion deal with Google, $45 billion with SpaceX, $35 billion with Lambda, and $11.6 billion with Akamai. These deals explain why its cash burn has continued.
The performance also mirrors that of OpenAI, another top company that Nvidia has backed. A recent report showed that OpenAI’s business will have over $280 billion in cash burn.
AI Bubble Risks Remain
All this is happening as investors have continued to worry about the AI bubble. In a recent YouTube video, Patrick Boyle, a popular analyst and hedge fund manager, made the case that we were in an AI bubble.
He cited the rising cash burn among companies like Anthropic and OpenAI, the circular nature of the industry, and the substantial valuations of these companies. Nvidia has been at the core of the circular investing cycle, where it invests in its customers.
Other top analysts like Ray Dalio and Michael Burry have warned about the AI bubble and that it may burst soon. Such a move will affect Nvidia, a company that is at the center of the AI industry.
Nvidia Share Price Forecast: Technical Analysis
The daily chart shows that NVDA stock has moved sideways this month. It is sitting near its all-time high of $236 as recent momentum fades.
Nvidia has remained above the 50-day Exponential Moving Average (EMA). Also, the stock has formed a diamond reversal pattern, which is a common bearish pattern. At the same time, it has formed a shooting star candle with a small body and a long upper shadow.
Therefore, the stock will likely reverse, with potential to reach support at $220. On the flip side, a move above the all-time high of $236 will signal further gains.
