Nvidia’s $5 Trillion Comeback Hinges on Hyperscaler Spending Spree

Nvidia has clawed its way back above the $5 trillion market capitalization threshold for the first time since October, setting the stage for a make-or-break week that will test whether the AI chipmaker’s valuation can hold. The stock closed at €177.66 in Frankfurt on Friday, within striking distance of its all-time high, after a four-month sideways grind finally gave way to a breakout.

The catalyst came from an unlikely source: Intel. The rival chipmaker posted first-quarter 2026 revenue of $13.58 billion, crushing the consensus estimate of $12.42 billion, with adjusted earnings per share of $0.29 against analyst expectations of just $0.02. Intel’s data-center chip sales jumped 22% year-over-year, sending its own stock to its best single-day performance since 1987.

For Nvidia, Intel’s numbers serve as a powerful proxy. While Intel supplies central processing units and Nvidia dominates graphics processing units for AI workloads, they share the same data-center infrastructure. Companies pouring money into Intel processors are almost invariably buying Nvidia chips alongside them. The strong Intel print effectively confirms that the AI infrastructure spending spree remains in full swing.

The $700 Billion Question

All eyes now turn to Wednesday evening, when Microsoft, Alphabet, Meta, and Amazon report quarterly results simultaneously. These four hyperscalers are Nvidia’s biggest customers, and their collective capital expenditure plans for 2026 are staggering:

• Microsoft is on track to spend roughly $146 billion on AI and cloud infrastructure in fiscal 2026
• Meta has penciled in investments between $115 billion and $135 billion for next year
• Amazon plans to deploy around $200 billion in the current year, the highest among the group

Combined, the four tech giants are eyeing nearly $700 billion in total outlays for 2026. Any signal that these budgets are being trimmed would hit Nvidia directly. Conversely, reaffirmed spending commitments would validate the stock’s recent surge.

Investors will be particularly focused on Microsoft’s Azure cloud business, seeking evidence that the massive infrastructure investments are translating into revenue growth. Meta’s aggressive spending plans, meanwhile, underscore the enormous capital required to train and deploy next-generation AI models.

Should investors sell immediately? Or is it worth buying Nvidia?

Fed Decision Adds Another Layer

The Federal Reserve’s two-day policy meeting concludes Wednesday, with markets expecting the central bank to hold its target range steady at 3.50% to 3.75%. Chair Jerome Powell’s commentary on inflation and economic growth will be scrutinized for clues about the rate path ahead. A hawkish tone could quickly dampen risk appetite across the semiconductor sector, just as investors are digesting the hyperscaler earnings.

Vera Rubin Production Cut, But No Panic

Beneath the near-term excitement, a structural issue is simmering. KeyBanc Capital Markets estimates that Nvidia has slashed its 2026 production target for the next-generation Rubin GPU from 2 million units to 1.5 million units. The culprit: delays in certifying the new HBM4 memory from SK Hynix and Micron. Forecasts for Vera Rubin server racks have been cut even more dramatically, from an original range of 12,000 to 14,000 units down to roughly 6,000.

KeyBanc analyst John Vinh maintains an “Overweight” rating on Nvidia with a $275 price target, arguing the impact is contained. Nvidia is still on track to ship over 60,000 NV72 server racks this year based on the existing Blackwell architecture, providing a massive revenue buffer while the Rubin ramp-up faces headwinds.

Own Numbers Due May 20

Nvidia reports its own fiscal first-quarter 2027 results on May 20. Management has guided for roughly 77% year-over-year revenue growth, with analysts expecting triple-digit earnings expansion. The comparison is flattered by a $4.5 billion charge in the year-ago period tied to US export restrictions on China — a market Nvidia has now fully written out of its forecast. China’s data-center business contributed $17.1 billion in revenue last year.

The hyperscaler earnings this week will determine whether that guidance rests on solid ground. A separate legal overhang remains: a class-action lawsuit accusing management of concealing the company’s exposure to the crypto market in 2018 is currently before an appeals court in San Francisco.

Nvidia shares have roughly doubled over the past 12 months. The next few days will deliver the most rigorous reality check yet for that valuation. If the cloud giants hold the line on spending, the breakout has legs. If they blink, the $5 trillion milestone could prove fleeting.