Nvidia: $35B Anthropic deal, strong quarter and buybacks

Nvidia shares slipped from $230 to $220 after last week’s earnings release, even as a string of commercial deals, strong results and large share repurchases drew attention from analysts.

Lambda, a company that receives backing from Nvidia, announced a $35 billion agreement with AI developer Anthropic for a project built by Hut 8. The project will provide 350 megawatts of capacity and will use Nvidia GPUs and other Nvidia products.

Nvidia reported revenue of $86 billion for the most recent quarter, a 106% increase from the prior year. The company guided to about $108 billion in revenue for the current quarter. Some analysts project actual revenue could exceed $112 billion for the quarter. Nvidia forecast revenue growth of roughly 77% for the next fiscal year, above analysts’ consensus expectation of about 44%.

The company repurchased approximately $26 billion of its stock in the second quarter and has about $99 billion remaining under its repurchase authorization. Outstanding shares fell to roughly 24.15 billion from 25.06 billion in 2022. Reducing the share count tends to increase earnings per share, other things being equal.

Valuation measures show a forward price‑to‑earnings ratio near 23, compared with a five‑year average around 42 and roughly in line with the S&P 500. The company’s Rule of 40 metric, calculated using free cash flow margin, stands at about 128%. Using operating margin and net margin produces values near 172% and 168%, respectively.

Analyst coverage has grown more bullish after the results. The average target among analysts covering Nvidia is about $322 per share. Raymond James analyst Simon Leopold has published a $515 target.

On technical charts, Nvidia shares are trading above the 50‑week exponential moving average, above a Supertrend indicator and above an ascending trendline that traces the stock’s lows since May 5. Chart observers have pointed to a recent pause in price gains and cited $300 as a possible near‑term level of interest.

Nvidia supplies GPUs and related products used in data centers and AI compute deployments. The Lambda‑Anthropic capacity agreement and the company’s recent revenue figures involve Nvidia hardware and commercial commitments tied to large‑scale AI infrastructure.