Nvidia Unleashes $118 Billion Capital Return as Telecom Emerges as Next Growth Frontier
25.05.2026 - 09:11:42 | boerse-global.de
Nvidia’s first-quarter earnings were a masterclass in financial firepower — but the market yawned. The chip giant posted record revenue of $81.6 billion, up 85% year over year, and still saw its stock drift lower in after-hours trading. It marks the fourth consecutive post-earnings decline, a pattern that has investors questioning what it will take to keep the rally alive.
The answer may lie not in the datacenter numbers that already dazzled, but in two other developments: an unprecedented cash return program and the quiet emergence of a second growth story.
$118 Billion in Firepower — and $0.25 Per Share
Nvidia’s board authorized an additional $80 billion in share buybacks on May 18, bringing total repurchase capacity to roughly $118 billion when combined with the $38.5 billion remaining under the existing program — and no expiration date. The quarterly dividend gets a 25-fold boost to $0.25 per share, payable June 26 to shareholders of record on June 4. Annualized, that’s $1 per share.
The capital return isn’t aspirational. In the first quarter alone, Nvidia funneled about $20 billion back to shareholders via buybacks and dividends, funded by free cash flow of $48.6 billion — nearly double the year-ago figure. The dividend hike alone represents a 2,400% increase, an almost unheard-of escalation for a company of this size.
Should investors sell immediately? Or is it worth buying Nvidia?
Datacenter Dominance, Edge Ambitions
The datacenter segment remains the undisputed engine, delivering $75.2 billion in revenue — up 92% year over year — fueled by Blackwell-300 products and strong demand for InfiniBand and NVLink solutions. Gross margins held at roughly 75%, while adjusted earnings per share of $1.87 topped analyst expectations of $1.77.
For the current quarter, Nvidia guided revenue of $91 billion, well above the consensus forecast of just under $87 billion. But beneath those headline numbers, a new reporting line is drawing attention: the Edge Computing segment, which includes AI-RAN base stations and 6G-related initiatives, contributed $6.4 billion in revenue, up 29% from a year ago.
That’s where the telecom story comes in. At the IEEE ICC 2026 conference in Glasgow, Ronnie Vasishta, Nvidia’s SVP for telecommunications, laid out how AI can support the entire lifecycle of 6G systems. The company has already announced collaborations with T-Mobile and Nokia to integrate physical AI applications into AI-RAN-capable infrastructure. By carving out Edge Computing as a separate disclosure line, Nvidia is giving investors a transparent view of what could become a meaningful second pillar.
The China Hole and the CPU Counterpunch
Not everything is rosy. Nvidia shipped no Hopper products to China in the quarter; that business had contributed $4.6 billion a year earlier. CEO Jensen Huang acknowledged demand in China is “very large” but conceded the company has “largely ceded” that market to Huawei.
To compensate, Nvidia is pushing aggressively into CPUs. The company is targeting around $20 billion in revenue from standalone processors in 2026 — a figure rivaling AMD’s entire annual sales. The Grace CPU is already in production; its successor, Vera, is slated to power CPU-only servers from 2027 onward, both built on Arm architecture and directly challenging Intel’s and AMD’s x86 dominance.
Nvidia at a turning point? This analysis reveals what investors need to know now.
Stock: Technical Pause or Strategic Doubt?
The stock’s post-earnings dip of roughly 1% belies a stronger longer-term picture. On a monthly basis, shares are up more than 11%; year to date, nearly 20%. However, the stock closed at 185.46 euros in recent trading, about 8% below its 52-week high of 201.05 euros. The RSI sits at 39.5, technically in neutral-to-oversold territory, yet the share price remains comfortably above all major moving averages — confirming the medium-term uptrend remains intact.
The real question for investors is strategic: Will the market price AI-RAN and 6G as a credible second growth path, or will those initiatives remain overshadowed by hyperscaler demand? Nvidia’s second-quarter results will provide the first measurable evidence of whether the Edge segment can sustain its momentum and turn telecom partnerships into tangible revenue. For now, the datacenter machine keeps humming, the capital return program is historic, and the next act is just beginning to take shape.
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