Key Insights
- Nvidia stock wavered despite announcing a $150 billion share buyback.
- A leaked Anthropic prospectus shows that its costs are soaring.
- The stock has formed a diamond reversal and a shooting star candle.
Nvidia stock has moved sideways over the past few days, encountering substantial resistance in its efforts to reach an all-time high. This consolidation persisted even following the announcement of a $150 billion share buyback. Underlying concerns that leading artificial intelligence companies are burning through cash have reignited fears regarding an AI bubble.
Nvidia Stock Wavers Despite Massive Buyback Plan
NVDA shares have stayed under pressure despite the unveiling of a major share repurchase program. Management announced in a statement that it will allocate an additional $150 billion toward buying back stock. In a prior statement released during first-quarter earnings, leadership had introduced an $80 billion share buyback plan.
Share buybacks typically serve as a bullish signal because they decrease the total count of outstanding shares. Indeed, historical data indicates that the company’s outstanding share count has fallen to 24.15 billion, down from over 25 billion in 2022.
The firm is increasing its repurchases on the heels of financial windfalls accumulated throughout the ongoing AI boom. Management also considers the stock highly undervalued, pointing to a forward price-to-earnings ratio of 20 that sits well below historical norms. Furthermore, its Rule-of-40 multiple is notably elevated, supported by revenue growth exceeding 100% alongside a 55% profit margin.
Anthropic IPO Prospectus Shows Massive Cash Burn
Nvidia’s share price has faltered in the wake of a leaked Anthropic initial public offering prospectus highlighting persistent cash burn. The document revealed that Anthropic’s revenue surged twelvefold in 2025 to approach nearly $4.6 billion. Even so, the business posted an operating loss of $8 billion and a net loss of $42 billion.
Anthropic has sustained its revenue momentum this year, bolstered by advanced models that establish it as a stronger competitor to OpenAI. Despite this growth, the enterprise has undertaken heavy spending commitments. It secured a $45 billion agreement with Nscale—an entity backed by Nvidia—alongside a $200 billion deal with Google, $45 billion with SpaceX, $35 billion with Lambda, and $11.6 billion with Akamai. These financial arrangements account for the ongoing cash burn.
This financial profile mirrors that of OpenAI, another prominent firm supported by Nvidia. A recent report indicated that OpenAI’s operations are projected to accumulate over $280 billion in cash burn.
AI Bubble Risks Remain
These developments unfold as investors maintain anxiety surrounding a potential AI bubble. In a recent YouTube video, well-known analyst and hedge fund manager Patrick Boyle argued that the market is currently situated within an AI bubble.
He pointed to escalating cash burn across firms like Anthropic and OpenAI, the interconnected or circular nature of the sector, and the towering valuations of these businesses. Nvidia sits at the center of this circular investment cycle, frequently investing in its own clients.
Additional prominent analysts, including Ray Dalio and Michael Burry, have issued warnings regarding an AI bubble and the possibility that it could pop soon. Any such correction would directly impact Nvidia, given its central role within the broader artificial intelligence industry.
Nvidia Share Price Forecast: Technical Analysis
The daily chart illustrates that NVDA stock has traded sideways throughout the month. It currently hovers near its record high of $236 as recent upside momentum begins to fade.
Nvidia continues to hold above the 50-day Exponential Moving Average (EMA). At the same time, the equity has developed a diamond reversal pattern—a recognized bearish indicator—alongside a shooting star candlestick characterized by a small body and an extended upper shadow.
Consequently, a downward reversal is likely, with the stock holding the potential to test support at $220. Conversely, a breakout above the all-time high of $236 would indicate the continuation of further gains.