U.S. stock markets were closed Monday for Memorial Day, halting trading in Nvidia (NASDAQ: NVDA) until Tuesday. The AI chipmaker's shares ended Friday at $215.33, a decline of 1.9% for the session and approximately 4.4% below the May 15 close.
The pause comes as investors digest Nvidia's latest earnings report, which showed fiscal first-quarter revenue of $81.6 billion—an 85% year-over-year surge. Data-center sales, a key driver of AI workloads, reached $75.2 billion, up 92% from the prior year. The company also issued a revenue forecast of $91 billion for the current quarter, plus or minus 2%, excluding any data-center compute revenue from China.
Nvidia raised its quarterly dividend to $0.25 per share from $0.01 and authorized an additional $80 billion for stock buybacks. CEO Jensen Huang described the rapid construction of what he calls "AI factories"—data centers dedicated primarily to artificial intelligence rather than general corporate computing.
Despite the strong numbers, investor sentiment has been cautious. Jacob Bourne, an analyst at eMarketer, noted that Nvidia's beat was "essentially priced in," with the key question being how long AI spending will persist into 2027 and 2028.
Sell-side analysts remain bullish. Bank of America's Vivek Arya raised his price target to $350 from $320, dismissing recent market noise and calling Nvidia's position a "near-monopoly" in AI factories. Needham & Co.'s Quinn Bolton increased his target to $270 from $240, while Bernstein's Stacy Rasgon raised his to $315 from $300, labeling Nvidia a potential "CPU king" as its Vera central processor targets a $200 billion market.
Competitive pressures persist. Alphabet's Google, Advanced Micro Devices, and Intel are developing custom chips, and AI spending is shifting from training models to inference—running models after they are built. Nvidia's stock now faces headwinds from potential cloud spending slowdowns and broader macroeconomic risks, including U.S. PCE inflation data due this week and energy concerns tied to the Strait of Hormuz.
Dell Technologies is set to report earnings Thursday, and traders are watching for signs of sustained AI server demand. Nvidia enters Tuesday with a market capitalization near $5 trillion, but the question remains whether continued good news can still lift the stock.
