Nvidia's Record Quarter and $80 Billion Buyback: The CPU Bet That Could Reshape the Stock

Nvidia's revenue surged 85% to $81.6B, but stock fell 4.34%. The chip giant announces $80B buyback, 25x dividend hike, and entry into $200B CPU market with Vera architecture.

The numbers were, by any measure, extraordinary. Revenue surged 85% to $81.6 billion, the data-center segment alone brought in $75.2 billion, and net income hit new highs. Yet Nvidia’s stock closed the week at €185.46, down 4.34% in five sessions. The disconnect between operational fireworks and a lukewarm market reception has become the defining story for the chip giant — and it’s forcing management to turn to two new levers: a massive capital return program and an audacious push into the $200 billion CPU market.

Those levers were pulled simultaneously last week. The board approved an additional $80 billion in share buybacks, adding to the $38.5 billion remaining from the previous authorization to create a total repurchase capacity of $118.5 billion. The quarterly dividend was hiked 25-fold, from a token $0.01 to $0.25 per share — a signal that Nvidia is no longer just a growth story but also a cash-return machine. The higher payout will be made on June 26 to shareholders of record on June 4. In the fiscal first quarter alone, $20 billion flowed back to investors through buybacks and dividends.

Behind that shift in capital allocation lies a broader strategic ambition. CEO Jensen Huang has set his sights on the mainstream processor market, betting the new "Vera" architecture can crack a $200 billion opportunity. Vera is designed specifically for autonomous AI agents, and top-tier labs are already integrating it into their next-generation infrastructure. The follow-on platform, "Vera Rubin," promises a fivefold improvement in inference performance while slashing cost per token. Production is already running at full tilt, with first shipments to partners scheduled for the second half of 2026. Amazon, Google and Microsoft are lined up as initial customers — hyperscalers that have become Nvidia’s lifeblood.

That lifeblood now gets more transparency for investors. Nvidia has reorganized its reporting structure, splitting the data-center segment into two lines: Hyperscale and ACIE (AI Clouds, Industrial, Enterprise). The latter encompasses government AI initiatives, where Nvidia claims to power roughly half of all tracked projects globally. The shift makes it harder to compare directly with prior quarters, but it also gives the market a clearer view of where the growth is coming from — and where it might be slowing. Notably, the Q2 guidance of $91 billion in revenue (plus or minus 2%) excludes any data-center compute sales from China, underscoring the geopolitical friction that remains a wild card.

For the current quarter, Nvidia expects GAAP gross margin of 74.9% and non-GAAP gross margin of 75.0%, each with a 50-basis-point band. Earnings per share came in at $2.39 on a GAAP basis and $1.87 on a non-GAAP basis. Yet even with these numbers, the stock struggled. The relative strength index sits at 40.5 — above oversold territory but well below the momentum levels seen earlier this year. The shares trade 10.1% above their 50-day moving average and 16% above the 200-day line, suggesting the underlying trend remains intact even if the immediate reaction was tepid.

Wall Street analysts, however, are betting on a rebound. Evercore ISI raised its price target to $413 from $352. Benchmark jumped to $335 from $250. JPMorgan edged up to $280 from $265, and Argus lifted its target to $270 from $220. Those upgrades reflect confidence that Nvidia’s expanding product reach — from GPUs to CPUs — will sustain the revenue momentum even as the market demands proof that growth, margins and valuation can coexist.

Investors will get their next chance to gauge that proof at the TD Cowen Technology Conference on May 28, followed by the BofA Global Technology Conference on June 4, where Nvidia’s management is expected to field questions on demand, China exposure, and the Vera CPU timeline. For now, the stock sits between two gravitational pulls: an unprecedented cash hoard and a processor ambition that could open a new front in the AI arms race, weighed down by a market that wants to see the next leg of the story before paying up for it.