Nvidia's Vera CPU and Israeli Expansion Signal a Shift Beyond GPUs, But the Stock Remains Stuck Below Peaks

Nvidia's first in-house CPU Vera targets AI labs, with $20B revenue forecast. Q1 revenue surged 85% to $81.6B, but shares lag due to China export restrictions and technical resistance.

Nvidia has stopped being solely a graphics chip company — and the market is still trying to decide whether that’s a buying opportunity or a reason to wait. The chipmaker recorded a stunning $81.6 billion in fiscal first-quarter revenue for 2027, up 85% year over year, but its shares trade roughly 8% below the May high. The disconnect reflects a company pushing into new territory even as geopolitical risks and technical resistance keep gains in check.

The CPU Invasion Begins

In a move that reshapes the competitive landscape, Nvidia has started delivering its first in-house CPU, Vera, to a select group of AI labs. Vice President Ian Buck personally hand-delivered initial systems to Anthropic in San Francisco, OpenAI in Mission Bay, SpaceXAI in Palo Alto, and Oracle Cloud Infrastructure in Santa Clara. CEO Jensen Huang called Vera “the world’s first CPU purpose-built for agentic AI.”

The chip packs 88 proprietary Olympus cores and delivers 1.2 TB/s of memory throughput. Performance per core under full load is 50% higher than conventional designs, targeting workloads where AI systems don't just generate answers but actively manage software, fetch data, and coordinate processes. Oracle Cloud Infrastructure plans to deploy hundreds of thousands of Vera CPUs in 2026, making it the first hyperscaler to run the chip at scale. SpaceXAI is evaluating the processor for reinforcement learning and simulation tasks.

CFO Colette Kress pegged the addressable CPU market at $200 billion. Nvidia had previously ignored this segment entirely. Now it expects nearly $20 billion in pure CPU revenue this year alone, with all major hyperscalers and system builders already on board. By comparison, AMD estimated the server CPU market at $26 billion in November 2025. If Nvidia hits its $20 billion target, it would command roughly 40% of that market even if the overall pie expands significantly.

Record Numbers, Cautious Expectations

The financial backdrop for the CPU push could hardly be stronger. Data center revenue soared 92% to $75.2 billion for the quarter. Free cash flow jumped to $48.6 billion. For the current quarter, Nvidia guided around $91 billion in revenue, comfortably above the LSEG consensus estimate of $86.84 billion. The guidance explicitly excludes China data center sales — a reminder that the world’s second-largest economy remains a missing piece.

Purchase commitments of $95.2 billion underpin the outlook, while a massive $80 billion share buyback program and a quarterly dividend of $0.25 per share (payable June 26) provide additional shareholder returns.

The China Question and the Israel Bet

Nvidia shipped no Hopper chips to China in the first quarter, compared to $4.6 billion in the same period last year. Although Jensen Huang attended Donald Trump’s meeting with Xi Jinping in Beijing as part of the U.S. delegation, no breakthrough emerged. Beijing continues to build out its own chip industry. Any reopening of the Chinese market would be pure upside — Nvidia’s own guidance doesn’t build it in.

Meanwhile, Nvidia is deepening its roots in Israel, a legacy of its $6.9 billion acquisition of Mellanox in 2019. The company has leased an 11-story, 29,000-square-meter building in Ofer Park, Yokneam, under a 10-year agreement worth roughly 230 million shekels, with completion expected by 2028. That brings total Nvidia space in the park to 67,000 square meters. Separately, a new headquarters is under construction on a 160,000-square-meter site in Kiryat Tivon.

Market Temperament: Support and Resistance

Despite the good news, Nvidia shares sit at around €184.64 (or €186.10 depending on the source), roughly 10% above the 50-day moving average but still below the all-time high from mid-May. Technical analysts identify the key hurdle at approximately $221. Only a confirmed breakout above that level would generate fresh momentum. Rothschild & Co Redburn maintains a buy rating with a $300 price target. Overall, 48 analysts recommend the stock as a buy, many citing the planned production ramp of the Vera-Rubin architecture in the second half of 2026 as a concrete catalyst.

Jensen Huang remains dismissive of competing approaches such as SRAM-based inference accelerators like LPX, calling them niche products with limited throughput. He argues that fewer than 20% of the total AI market is relevant for such chips. Instead, Nvidia is betting on the flexibility of GPU architectures and the coming wave of “agentic AI” — autonomous systems that carry out tasks independently — as the next major demand driver across enterprises.

Nvidia’s expansion into CPUs and physical infrastructure in Israel, combined with record financials, present a powerful narrative. But the market, still nursing the post-peak hangover, appears to be waiting for proof that this new era will translate into sustained price momentum.