Nvidia's $80 Billion Buyback and Vera CPU Ambition Mask a China Exit That's Reshaping the Business

Nvidia's Q1 revenue surged 85% to $81.6B, yet shares fell 4% amid profit-taking. The company exits China's AI market, unveils Vera CPU, and authorizes $80B buyback.

The numbers were staggering, the share buyback historic, and the dividend hike jaw-dropping. Yet Nvidia’s stock ended last week with a fourth consecutive post-earnings decline, closing Friday at €185.46 — down 1.83% on the day and roughly 4% over the week. The chipmaker has become a victim of its own success: quarterly results that would electrify almost any other company now routinely trigger profit-taking.

Revenue for the first quarter of fiscal 2027 hit $81.6 billion, an 85% surge year-over-year. The data-center segment alone generated $75.2 billion, up 92%, with networking revenue tripling to around $15 billion. CEO Jensen Huang summed up the demand environment in a single word: “parabolic.” For the current quarter, Nvidia guided to $91 billion in revenue, a 95% increase that comfortably beat the $87.2 billion consensus.

That cash generation is extraordinary. Free cash flow reached $48.6 billion in the quarter. The board responded on May 18 by authorizing an additional $80 billion in share repurchases with no expiration date — on top of the $38.5 billion remaining from previous programs, giving Nvidia a combined firepower of over $118 billion. The quarterly dividend was lifted from $0.01 to $0.25 a share, a 25-fold increase, payable June 26 to holders of record June 4.

But the strategic story that matters most came straight from Huang: Nvidia has essentially abandoned the Chinese AI-chip market. The CEO told investors he expects “nothing” in terms of export licenses for shipments to China, and the company is planning for zero data-center revenue from the country in the current quarter. Before US export controls began in 2022, Nvidia commanded roughly 95% of China’s AI accelerator market and drew at least a fifth of its data-center sales from the region. Huawei is filling the void; its AI chip division is expected to generate $12 billion in revenue in 2026, up from $7.5 billion last year.

While one door closes, another swings open. Nvidia unveiled the Vera CPU, a processor designed specifically for agentic AI — autonomous systems that handle tasks independently while GPUs continue to power training workloads. Huang pegged the addressable market for this technology at $200 billion, with Vera-CPU sales alone projected to hit $20 billion by 2026. The next-generation Rubin systems are on track to launch in the third quarter of 2026, promising to extend the platform cycle beyond Blackwell.

Wall Street remains overwhelmingly bullish. One analyst set a new street-high target of $500, citing Nvidia’s growing inferencing share, deepening hyperscaler relationships, and the Vera-Rubin pipeline. Among 52 analysts covering the stock, the average price target stands at $303.27, with 40 buy ratings, one hold, and one sell. UBS lifted its target to $280 after the results, while Morningstar raised its fair value estimate from $260 to $280, highlighting the moat created by the CUDA software ecosystem.

Technically, the stock is edging toward oversold territory with an RSI of 40.5 — but not quite there yet. Two key uncertainties will test the narrative in coming months: the Trump administration’s evolving export policy on China and the risk that in-house chip projects from Microsoft and Amazon could erode Nvidia’s long-term market share. For now, though, the demand trajectory remains so steep that even losing a major market and seeing record results bring a shrug from investors.