Beyond the Datacenter: How Nvidia Plans to Dominate Telecom and Return $119 Billion to Shareholders
25.05.2026 - 13:33:10 | boerse-global.de
Nvidia’s latest earnings report showcased a company firing on almost every cylinder – yet the market response was muted at best. With the stock hovering around 188.84 euros on Monday, up just 1.82% on the day, investors appeared to be looking past the record numbers and asking what comes next. The answer, it turns out, involves both a staggering capital return program and a concerted push into the telecom sector.
The chipmaker’s fiscal first-quarter revenue hit $81.6 billion, an 85% surge from a year ago, while adjusted earnings per share of $1.87 comfortably topped the consensus estimate of $1.76. The datacenter business remained the undisputed engine, contributing $75.2 billion – up 92% year-over-year. Yet the stock remains 6.07% below its 52-week high of 201.05 euros, set on May 14, suggesting the bar for sustained excitement has been raised considerably.
What may have caught the market’s attention more than the headline numbers was Nvidia’s announcement of an additional $80 billion in share repurchase authorization. Combined with $38.5 billion left over from previous programs, the total buyback firepower now stands at nearly $119 billion. The board also hiked the quarterly dividend by a factor of 25, to $0.25 per share. In the quarter alone, Nvidia returned $20 billion to shareholders, underpinned by free cash flow that more than doubled to $48.6 billion.
The capital return program signals something broader: Nvidia can simultaneously fund its own explosive growth – including the next generation of AI infrastructure – and return vast sums to investors. That combination is a differentiator among high-flying AI plays, many of which remain cash-burning ventures.
Should investors sell immediately? Or is it worth buying Nvidia?
Alongside the financial engineering, Nvidia is laying groundwork for a second major growth pillar outside the datacenter. At the IEEE ICC 2026 conference in Glasgow, which kicked off on May 24, senior vice president Ronnie Vasishta delivered a keynote on how AI can support the entire lifecycle of 6G systems. Sessions running through May 28 will cover digital twins and AI-native network architectures.
The telecom push is more than conference rhetoric. Nvidia has already incorporated AI-RAN (AI-radio access networks) into its official earnings reporting. In the Q1 filing, the company explicitly listed AI-RAN base stations as part of its new edge-computing platform. It also announced partnerships with T-Mobile and Nokia to integrate physical AI applications into AI-RAN-capable infrastructure.
The early financial contribution remains modest. The edge-computing segment, which includes AI-RAN, generated $6.4 billion in revenue – up 29% year-over-year but still a fraction of the datacenter business. For now, the hyperscaler-driven core dominates the narrative, but the separate reporting line gives investors a clear way to track telecom’s trajectory.
Another growth vector comes via a deepened partnership with Marvell Technology. Nvidia is investing $2 billion in custom XPUs and networking solutions tied to its NVLink Fusion platform, targeting the next generation of AI data centers. The move also supports AI-RAN, helping Nvidia reduce its reliance on traditional hyperscale cloud customers and tap industrial applications.
One persistent headwind remains China. Owing to export restrictions, Nvidia shipped no datacenter chips into the Chinese market this quarter. Local rivals like Huawei are gaining ground, capping the company’s addressable market in a region that had been a major growth driver.
Looking ahead, Nvidia guided for around $91 billion in revenue for the current quarter. The Vera CPU, announced as part of the next-generation architecture, is expected to enter production in the third fiscal quarter and represents a standalone annual revenue opportunity of roughly $20 billion.
Nvidia at a turning point? This analysis reveals what investors need to know now.
On valuation, the stock trades at a forward price-to-earnings ratio of about 25.77, well below the semiconductor sector average of 36.78. The market cap, however, has swelled past $5.2 trillion. Analysts remain overwhelmingly bullish, with a consensus “Strong Buy” rating and an average price target of $303.27 – implying roughly 40% upside from recent US levels.
Technically, the stock sits above all key moving averages, confirming the medium-term uptrend. The relative strength index of 39.5 puts it in neutral-to-oversold territory. Year-to-date, the shares have gained 17.22%, while the 12-month return stands at over 57%.
For investors, the critical question is whether telecom and edge computing can evolve into a credible second growth path, or whether they will remain overshadowed by the hyperscaler demand engine. The second-quarter report will offer the first hard data on whether AI-RAN is gaining traction. Until then, the sheer scale of the buyback program and the Vera CPU timeline give the bulls plenty to hold onto.
Ad
Nvidia Stock: New Analysis - 25 May
Fresh Nvidia information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
