Nvidia Shares Slide 2% as Hyperscaler Capex Surges 30% and Buybacks Slow
Nvidia shares slipped 2% after hyperscaler capital expenditures jumped 30% year-over-year while overall share repurchases decelerated by 25% last quarter and software peers fell 4%. Investors are now looking to expanded OpenAI GPU deployments and potential partnership updates as the next catalyst.
1. Sector Volatility Impacts Nvidia
Nvidia stock declined 2% on Wednesday as the broader AI-focused index turned choppy. Hyperscaler clients reported a 30% rise in data-center capex year-over-year, contributing to a rotation away from chipmakers and into infrastructure providers.
2. Buyback Deceleration Weighs on Shares
The company’s quarterly share repurchase program slowed by 25% compared with the prior period, a shift that analysts say undercuts support for the stock’s valuation. Reduced buyback activity has coincided with underperformance in software names, which dropped 4% over the same session.
3. OpenAI Partnership as Next Catalyst
With near-term headwinds from sector rotation, investors are focusing on Nvidia’s strategic ties to OpenAI. Upcoming GPU rollouts for OpenAI’s new model could drive an incremental $500 million in revenue next quarter, offering a potential upside trigger for the shares.