Nvidia's Record $81.6B Quarter and $80B Buyback Can't Lift the Stock: The Market Sees a Priced-In Future

Nvidia posts $81.6B revenue (+85% YoY) and $48.6B free cash flow, unveils Vera CPU for agentic AI, but stock falls 4.3% as Wall Street had priced in optimism.

Nvidia has delivered what many would call a blowout quarter — $81.6 billion in revenue, an 85% year-over-year surge, and a second-quarter forecast of roughly $91 billion that implies another 95% jump. Yet shares closed the week at €185.46, shedding 4.34% in five sessions. It's the fourth consecutive time the stock has fallen immediately after an earnings release, hinting that Wall Street's optimism had already been baked in.

The data center segment, the company's growth engine, powered the period with $75.2 billion in sales — 92% above last year. Within that, networking alone tripled to around $15 billion. CEO Jensen Huang described demand as "parabolic," a characterization that the numbers easily support. But the market's reaction suggests investors are looking past the headline fireworks to the risks on the horizon.

A $200 billion CPU bet takes shape

Beyond the quarterly figures, Nvidia unveiled its Vera CPU, a processor designed specifically for agentic AI — autonomous systems that execute tasks independently while GPUs handle heavy training workloads. Huang pegged the addressable market for this technology at $200 billion, with Vera CPU sales expected to hit $20 billion by next year. The next-generation Rubin systems, meanwhile, are slated for availability in the third quarter of 2026.

The move marks a strategic expansion into a new silicon category, potentially broadening Nvidia's total addressable market beyond the traditional GPU-centric AI narrative. But it also raises questions about execution and competition, especially as rivals in the chip space sharpen their own AI offerings.

Cash gush fuels record buyback and dividend hike

Free cash flow in the quarter reached $48.6 billion, giving Nvidia plenty of firepower for capital returns. The board authorized an additional $80 billion in share buybacks, layered on top of the $38.5 billion remaining from previous programs. The dividend was also raised 25-fold — from $0.01 to $0.25 per share — a move that made headlines more for its symbolism than its absolute size.

That cash-generation machine is one of the few unqualified positives for income-focused shareholders. Yet even with a $48.6 billion quarterly cash gush and $80 billion buyback authorization, the stock failed to catch a bid.

Analysts lift targets, but caution lurks

The sellside response was predominantly bullish. Benchmark raised its price target from $300 to $500, Evercore moved from $352 to $413, and Bank of America confirmed its buy rating with a new $350 target. UBS, JPMorgan and Jefferies also tweaked their estimates higher. The consensus among 52 analysts sits at $303.27, implying modest upside from current levels.

Morningstar lifted its fair value estimate from $260 to $280, citing Nvidia's wide economic moat from the CUDA software ecosystem. Zacks Research, however, bucked the trend by downgrading the stock to "Hold."

Technicals signal fatigue, not capitulation

Despite the week's decline, the stock remains above both its 50-day moving average of €168.44 and its 200-day line near €160. The year-to-date gain of roughly 15% remains intact, and the one-year return is nearly 57%. But the relative strength index has slipped to 40.5, approaching oversold territory without quite reaching it.

The underlying trend is not broken, but the post-earnings pattern is unmistakable: each quarterly beat is met with a fading rally or outright selloff. Market observers point to high valuation expectations and a concentrated customer base as factors limiting upside. Some also note that the company's guidance now explicitly excludes revenue from data center chips in China, a hole that investors are increasingly watching.

For now, the focus shifts to whether buyers can defend the €185 level in the coming days. If not, the consolidation could deepen — even as Wall Street's price targets keep climbing. The next catalyst may be the Rubin system launch in the second half of 2026, when real revenue from that new architecture will begin to flow.