Josh Belanger

QQQBullish

5d ago

Stop Fighting the AI Trade. You Will LOSE

AI trade is resilient to rising yields; betting against the Nasdaq loses, pending Micron results.

QQQNeutral

5d ago

Buy Every NVDA Dip Before Nvidia BEATS You to It

Nvidia is buying Nvidia. The board said so Monday before the open. It added $150 billion to the company's buyback. A buyback is a company spending its own cash to buy its own shares back from the market. Nvidia calls it the largest buyback increase in history. The Street heard one message. CNBC's Tuesday headline said the stock was too cheap for Huang to resist. Nvidia made the move Tim Cook made at Apple. Nvidia Just SMASHED Apple's Buyback Record Apple held the old record. It authorized $110 billion. Nvidia just topped it, and now has $235 billion left to spend. An authorization is permission from the board. Cook took a growth company and made it a growth value stock: still growing, but also handing large amounts of cash back to shareholders. It's possible Jensen Huang is the next Tim Cook. Look at the cash. Nvidia generated $69.9 billion of free cash flow in six months. Free cash flow is the money left after running the business and paying for its buildout. In its second quarter the company bought back billions of dollars of stock. It returned even more in total. It still held tens of billions in cash. Plus even more in marketable debt, meaning bonds it can sell fast. What else does it do with all that money? Across the AI landscape, this was the next logical step. Nvidia Itself Is Now the Buyer Under the Price Run the math. Spread $235 billion evenly over the months left, and that is about $14.7 billion a month. The even-spend pace is more than Nvidia's recent free cash flow each month. It is more than double what Nvidia spent on buybacks each month in the second quarter. At Monday's close the company was worth about $5.5 trillion. The full authorization covers about 4.3% of it. The release says Nvidia "expects" to finish the program through fiscal 2028. It gives a horizon and says nothing about pace. Still, that creates a natural bid under the price. A bid is a buyer standing ready to take shares. Here the buyer is the company itself, with more cash coming in every quarter. Wall Street loves that. The Nasdaq FELL. Nvidia Went Up Anyway. Monday, the Nasdaq Composite fell 0.92%. The 10-year Treasury yield closed at 5.24%. That is the interest rate on long-term government debt. When it runs that high, profits far in the future are worth less today. Nvidia finished at $228.86. Up 1.68% from Friday. Those are the headwinds. Nvidia rose anyway, the same day it announced the buyback. A safe haven is the name investors move money into when the rest of a trade weakens. For the AI trade, that name has to be big and backed by cash. Nvidia is worth trillions and generated $69.9 billion of free cash flow in six months. I think with the current headwinds, any dip in this name is a buy. And if the AI trade starts to get shaky in the coming weeks, Nvidia likely becomes the AI safe haven trade. What to Watch Nvidia's own customers. Real funding stress at OpenAI or the AI labs whose leases Nvidia has guaranteed. Those guarantees run up to $105 billion. A wobble that starts there is the one that breaks the safe haven read. Nvidia on down days. If it falls with the Nasdaq instead of holding up, the market does not treat it as the safe name. The buyback dollars. Nvidia reports its repurchases every quarter. Spending near $14.7 billion a month backs the bid. Spending below that pace, or any change to the timeline, means Nvidia is buying back less than it authorized.

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