Nvidia’s $118 Billion War Chest Meets a Skeptical Market: Why the Next Move Hinges on More Than Buybacks
24.05.2026 - 04:21:46 | boerse-global.de
The euphoria that usually follows a record quarterly report from Nvidia is conspicuously absent this time. The stock ended the week at €185.46 in European trading, down 1.83% on Friday and 4.34% lower over the five-day stretch. That tepid reaction came despite a haul that would make most companies blush: revenue of $81.6 billion for the first fiscal quarter, an 85% surge from a year ago, and earnings per share of $2.39 on a GAAP basis.
The board moved swiftly to reward shareholders, approving an additional $80.0 billion in share buybacks and jacking up the quarterly dividend from a token $0.01 to $0.25 a share. Combined with the $38.5 billion still left from the previous authorization, Nvidia now commands a total repurchase capacity of $118.5 billion. In the quarter just ended, it funneled roughly $20.0 billion back to investors through buybacks and dividends. The higher dividend is payable on June 26 to holders of record on June 4.
Yet the market’s muted response points to a growing disconnect. Operating strength is colliding with a new discipline on valuation. Investors are no longer willing to chase the stock higher on headline numbers alone; they want proof that the blistering pace can be sustained, and they’re weighing the macro headwinds that could temper even the mightiest tech titan.
The next big test comes on May 28, when the U.S. releases the Personal Consumption Expenditures price index for April. Economists expect a month-on-month rise of 0.4%, pushing the annual rate to 3.8%. The PCE is the Federal Reserve’s preferred inflation gauge, and any upside surprise would directly pressure growth stocks like Nvidia by fueling hawkish rate expectations. That same day, the second estimate for first-quarter GDP arrives, giving the market a fuller picture of how sticky inflation is interacting with economic growth.
Should investors sell immediately? Or is it worth buying Nvidia?
For now, Nvidia is not waiting for the macro winds to shift. The company has been quietly building out its own ecosystem. In the latest quarter, it invested roughly $18.6 billion in venture-style stakes, placing strategic bets across software, platforms, and data-center architecture. The goal is clear: evolve from a chip supplier into a provider of complete AI infrastructure. A separate agreement with the U.S. Department of Defense, governing the lawful use of Nvidia technology for national defense applications, opens yet another demand channel beyond the hyperscalers.
Wall Street analysts remain bullish. Baird has a price target of $500, Evercore ISI sees $413, and the consensus of 62 experts stands at $294.22 — implying roughly 36% upside from current levels. The immediate technical test is the $250 mark, about 14% above today’s price. A breakout there would push Nvidia’s market capitalization toward $6 trillion. Management’s guidance for the current quarter — $91 billion in revenue (plus or minus 2%) — provides fundamental backing for that ambition. The ramp of the Blackwell 300 and Vera Rubin platforms is the key catalyst.
But there are subtle shifts under the hood. Nvidia is changing its financial reporting structure. Going forward, it will report under two platforms: Data Center and Edge Computing. Within data center, it will separate Hyperscale from ACIE — AI Clouds, Industrial, and Enterprise. That gives investors more granularity but also makes quarter-over-quarter comparisons trickier at a time when every growth rate is under a microscope.
Notably, the Q2 guidance does not include any data-center compute revenue from China, underscoring the ongoing exit from that market. The margin picture remains robust: Nvidia expects GAAP gross margin of 74.9% and non-GAAP gross margin of 75.0%, both with a 50-basis-point leeway.
Technically, the stock is in a gray zone. It trades 10.1% above its 50-day moving average and 16% above the 200-day line. The relative strength index sits at 40.5 — not oversold, but far from the momentum-driven territory of previous weeks. Key support lies around $215. The $80 billion buyback program provides a long-term demand cushion, but it cannot substitute for a macro tailwind.
Nvidia at a turning point? This analysis reveals what investors need to know now.
Two important events will test management’s messaging. On May 28, Nvidia’s executives appear at the TD Cowen 54th Annual Technology, Media, & Telecom Conference at 7:15 a.m. PT. On June 4, they take the stage at the BofA Global Technology Conference at 8:40 a.m. PT. Both sessions will be webcast and archived for 90 days.
For now, the stock is caught between two powerful forces. On one side lies an AI business of historic proportions and a massive capital-return program. On the other stands a market that wants more evidence that the growth, margins, and valuation still fit together. The inflation print on May 28 could tip the scales.
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