Nvidia's Earnings Week Brings a $150 Billion Buyback Gamble and a China Standoff into Focus

Nvidia faces a pivotal earnings report amid plans for record $150B share buyback and escalating China chip export tensions, with stock near highs.

Investors heading into Nvidia’s first-quarter earnings report on Wednesday face an unusual dual narrative: the company is simultaneously planning the largest share buyback in its history and watching a multibillion-dollar China market slip further out of reach. The stock closed at €193.90 in Frankfurt on Friday, within 4% of its 52-week high, leaving little room for error when the numbers land.

The tension between capital returns and geopolitical risk is sharpening by the day. UBS analyst Timothy Arcuri sees a strong case for Nvidia to authorise a buyback programme worth close to $150 billion over the coming year. That would dwarf the $41.1 billion the company returned to shareholders in the past fiscal year, from an existing authorisation that still had roughly $58.5 billion available. Such a move would signal that management intends to channel a significant portion of the AI boom’s free cash flow directly back to investors, rather than ploughing it all into capacity and R&D. At the same time, pressure is building for a dividend increase, which could broaden the stock’s appeal to income-focused institutional funds.

Yet on the other side of the ledger sits China. The US Commerce Department has granted around ten Chinese companies — including Alibaba, Tencent, ByteDance and JD.com — permission to buy Nvidia’s H200 chips, each authorised for up to 75,000 units for civilian use only. To date, not a single chip has been shipped. CEO Jensen Huang travelled to Beijing as part of a US delegation, but a hoped-for breakthrough with President Trump’s administration did not materialise. The stock fell more than 4% on Friday to $225.32 as the regulatory logjam persisted.

The scale of what is at stake is enormous. Before export restrictions were tightened, Nvidia held roughly 95% of China’s AI chip market, and the country represented about 13% of total revenue. Huang himself estimated China’s AI market at $50 billion for this year alone. The Bureau of Industry and Security is now reviewing H200 export licences on a case-by-case basis, creating planning uncertainty not just for Nvidia but for the entire supply chain. Meanwhile, Chinese tech giants such as Tencent and Alibaba have accelerated their own chip development efforts, deepening alternatives that could lock Nvidia out for years.

Amid the China stalemate, Nvidia is reinforcing its US industrial footprint. A multi-year partnership with Corning will significantly expand domestic production of optical connectivity solutions for AI data centres. Corning plans to boost its US fibre-optic capacity by more than 50% and build three new factories in North Carolina and Texas. The components are designed to support data centres running on Nvidia’s Blackwell architecture and eventually its upcoming Vera Rubin platform. This strategic push embeds Nvidia deeper into the infrastructure chain — a hedge against supply disruptions and a bet that the next build-out cycle will demand far more than just GPUs.

Wall Street remains broadly constructive despite the crosswinds. Bank of America lifted its price target to $320, citing Nvidia’s multi-year product pipeline and a total addressable market for AI data centres that it now estimates at $1.7 trillion by 2030 — up from a prior $1.4 trillion. Bernstein and Citi both see the stock at $300, while UBS is more conservative at $245. The share price in Frankfurt has rallied roughly 14% over the past month, underscoring the elevated expectations ahead of the print.

For the quarter that ended in April, Nvidia guided for revenue of $78 billion, with a two-percentage-point range of variability. Analysts are now looking for adjusted earnings per share of $1.78 on revenue of about $79 billion. The real focus, however, is on the outlook for the current quarter and, more critically, on whether the transition from the Blackwell architecture to Vera Rubin can occur without significant margin pressure. The company’s largest customers have been ramping their own budgets sharply: Meta raised its capex ceiling to $145 billion, and Microsoft now plans $190 billion for the current calendar year.

On May 20, three forces converge — short-term revenue momentum, the dawn of Vera Rubin expectations, and the potential for a massive new capital return programme. A strong forecast would reinforce the valuation. Any stumble on margins or the delivery timeline could quickly shift the narrative from AI dominance to stretched pricing. And whether the H200 export licences thaw before or after the call will influence how the market digests every figure.