Nvidia Stocks Surge 2.6% as Morgan Stanley Restores Top-Pick Status

Nvidia's board approved a $150B share buyback plan, raising its total buyback capacity to $235B. Analysts estimate this could reduce shares by 4.2% and boost EPS by 1.6% by 2028. NVDA stock rose 2% to $235.5, reaching a market cap of $5.7T. The stock has gained 25% YTD.

Federal prosecutors charged Greg Lui with illegally shipping $300M worth of NVIDIA AI chips to China, violating US export laws. Officials claim NVIDIA overlooked red flags, such as unusual chip flows to Southeast Asia and data centers in China housing restricted NVIDIA processors. NVIDIA denies wrongdoing, stating it follows US laws and that Huawei's progress reduces smuggling incentives. The company also disputes allegations that it should have noticed OBON's lack of data center capacity.

Nvidia's stock rose 1.1% to $236.8 after Morgan Stanley reinstated it as a top pick, maintaining an Overweight rating and $300 price target. The firm cited AI demand and supply constraints as drivers. Nvidia's GF Score is 96/100, but valuation remains a concern. Investors will watch for execution on the next product cycle.

AI skeptic Ed Zitron warns of a 'brewing crisis' in AI-related debt, citing higher borrowing costs and delays. Amazon (AMZN) may use complex financing for $8B of Nvidia (NVDA) chips. Goldman Sachs reports $88B in lower-rated AI-related borrowing. CoreWeave (CRWV) has $35.6B in debt, relying on private credit. Zitron estimates CoreWeave's debt costs could reach 13%. Anthropic's revenue growth challenges Zitron's earlier predictions, but financing remains a concern.

A California business owner, Greg Lui, was arrested for allegedly smuggling $300M worth of Nvidia chips to China without proper export licenses, violating US regulations. The hardware, including A100 and H100 GPUs, was shipped via Malaysia and Singapore to evade US export controls. The US government accuses Lui of knowingly circumventing laws to supply advanced AI technology to China. Lui faces charges with a maximum sentence of 50 years.

Amazon (AMZN) is reportedly considering spinning off $8 billion worth of Nvidia (NVDA) AI chips into a special purpose vehicle, according to The Financial Times. The move would allow Amazon to lease the chips back, avoiding depreciating assets on its balance sheet. The chips are already installed in data centers across five states. Amazon and Nvidia shares were up about 2% in recent trading, with Amazon up 10% and Nvidia up 27% year-to-date.