Reflecting its leadership in the AI chip market, Nvidia (NVDA, Financials) is up 179% year-to- date; yet, its cash reserves are giving more ammunition for analysts. Valued at $38.5 billion as of October 31, 2024, Chief Financial Officer Colette Kress of the UBS Global Technology and AI Conference in Arizona said that the company's considerable cash reserves are under consideration for strategic mergers and acquisitions to acquire fresh talent and skills.
Nvidia's cash levels increased from $34.8 billion in the previous quarter to $38.5 billion at the end of its fiscal third quarter. Driven by growing demand for its artificial intelligence processors, the cash accumulation shows good financial success.
Apart from M&A prospects, Nvidia has been heavily returning money to owners. Declaring financial situation confidence, the company revealed in August 2024 a $50 billion stock repurchase program among the largest this year.
Although the business has a bright future, authorities have noticed Nvidia's attempts to raise the AI presence. Currently looking at Nvidia's $700 million bid for Israeli artificial intelligence company Run:ai is the European Union. The investigation mostly addresses possible antitrust issues, particularly regarding whether Nvidia has been providing discounts to consumers purchasing both hardware and GPU software. With an 84% market share in the GPU sector, the EU's probe centers on Nvidia's actions likely to support its market leadership.
These activities show how Nvidia uses its growing cash reserves to negotiate the regulatory environment that fits its market posture and reward shareholders in addition to investigate strategic acquisitions.
