BofA Says Nvidia Could Allocate $26B–$51B for 0.5%–1% Dividend Yield
Bank of America suggests Nvidia could boost its near-zero dividend yield to 0.5%–1% by allocating $26–51 billion (15%–30% of projected $400 billion free cash flow in 2026-27) to shareholder returns, narrowing its valuation discount (26x 2026 EPS vs peer 49x). Nvidia holds a 90% share of the GPU market and targets 39% annual revenue and EPS growth through 2029, trading at 25x forward earnings and outperforming unprofitable rivals valued at 37x 2028 sales.
1. Re-rating Catalyst Proposal
Bank of America analysts propose raising Nvidia’s dividend yield from near-zero to 0.5%–1% by using $26 billion to $51 billion (15%–30% of projected $400 billion free cash flow in 2026–27) for shareholder returns, aiming to narrow its valuation gap versus peers trading at 49x EPS versus Nvidia’s 26x. This adjustment could attract more income-oriented funds and boost the stock’s re-rating potential.
2. Market Position and Growth Outlook
Nvidia controls roughly 90% of the GPU market with expected annual revenue and EPS growth of 39% through 2029. The shares trade at 25x forward earnings, highlighting a more reasonable valuation versus unprofitable AI infrastructure rivals valued at 37x 2028 sales.