Nvidia (NVDA) stock has moved sideways over the past few days, with each attempt to push toward its all-time high meeting substantial resistance. The wavering persisted even after the company announced a $150 billion share buyback, as a key concern weighed on sentiment: top AI companies are burning cash at an accelerating pace, reigniting fears of an AI bubble.

Nvidia Stock Wavers Despite Massive Buyback Plan

NVDA has remained under pressure even as management said in a statement that it will spend an additional $150 billion on share repurchases. The announcement followed a previous statement during first-quarter earnings, in which management unveiled an $80 billion share buyback plan.

Share buybacks are generally viewed as bullish because they reduce the number of outstanding shares. Historical data shows Nvidia's outstanding shares have fallen to 24.15 billion from more than 25 billion in 2022.

The company is boosting its repurchases with the windfall it has received during the ongoing AI boom. It also considers its stock highly undervalued: the forward price-to-earnings ratio, a valuation measure based on projected earnings, stands at 20, well below its historical levels, while its Rule-of-40 multiple, a benchmark combining revenue growth and profit margin that is commonly applied to fast-scaling technology companies, is significantly elevated, underpinned by revenue growth of more than 100% and a profit margin of 55%.

Anthropic IPO Prospectus Shows Massive Cash Burn

Part of the pressure on Nvidia stems from a leaked Anthropic IPO prospectus, which showed that the AI company's cash burn is continuing. The filing revealed that Anthropic's revenue jumped twelvefold in 2025 to nearly $4.6 billion. Despite that growth, the firm lost $8 billion on an operating basis and posted a net loss of $42 billion, a figure that dwarfs its annual revenue.

Anthropic's revenue growth has continued this year, helped by advanced models that have made it a bigger competitor to OpenAI. Even so, the company has made enormous spending commitments. It signed a $45 billion deal with Nscale, a company that Nvidia has backed, along with a $200 billion deal with Google, $45 billion with SpaceX, $35 billion with Lambda, and $11.6 billion with Akamai. These agreements help explain why its cash burn has persisted.

The market scrutinizes these disclosures because much of an AI developer's spending is directed at computing infrastructure, where Nvidia is the leading supplier, making the financial health of the sector's biggest spenders a key gauge for the durability of demand for its chips. The picture mirrors that of OpenAI, another leading company Nvidia has backed. A recent report indicated that OpenAI's business is on track for more than $280 billion in cash burn.

AI Bubble Risks Remain

These developments come as investors continue to worry about the AI bubble. In a recent YouTube video, Patrick Boyle, a popular analyst and hedge fund manager, made the case that markets are in an AI bubble. He cited the rising cash burn among companies such as Anthropic and OpenAI, the circular nature of the industry, and the substantial valuations of these companies.

Nvidia has been at the core of that circular investing cycle, in which it invests in its own customers. Other prominent analysts, including Ray Dalio, the founder of hedge fund Bridgewater Associates, and Michael Burry, the investor best known for betting against the U.S. housing market before the 2008 financial crisis, have warned about the AI bubble and that it may burst soon. Such an outcome would affect Nvidia, a company that sits at the center of the AI industry. Attention now turns to whether Anthropic's official IPO documents confirm the leaked figures, and to Nvidia's next quarterly report, which will show whether demand from AI developers is keeping pace with the sector spending commitments.

Nvidia Share Price Forecast: Technical

The daily chart shows that NVDA stock has moved sideways this month, sitting near its all-time high of $236 as recent momentum fades. The stock has remained above the 50-day Exponential Moving Average (EMA), a widely followed gauge of short- to medium-term trend.

However, the stock has formed a diamond reversal pattern, a common bearish formation that typically emerges near the end of extended rallies as price volatility first widens and then contracts, and has also printed a shooting star candle characterized by a small body and a long upper shadow. Based on these formations, the analysis points to a likely reversal, with potential for the stock to reach support at $220. On the flip side, a move above the all-time high of $236 would signal further gains.