Bank of America Urges Nvidia to Boost Dividend to 0.5%–1%
Nvidia is projected to generate over $400 billion in cash flow across 2026–27 yet trades at 26x 2026 estimates vs peers’ 49x and offers a 0.02% dividend yield. Bank of America proposes raising its payout to 0.5%–1% at a cost of $26–51 billion to attract income funds and close its valuation gap.
1. BofA Recommends Higher Payout
Bank of America analysts argue that Nvidia’s near-zero dividend yield excludes it from income-oriented portfolios and that boosting the payout to 0.5%–1% could broaden its shareholder base.
2. Valuation and Dividend Shortfall
Despite generating over $400 billion in free cash flow in 2026–27 and trading at 26x forward earnings, Nvidia’s dividend yield of 0.02% lags the peer average of 0.89%, deepening its valuation discount.
3. Cost and Impact
Raising the dividend to 0.5%–1% would require $26–51 billion, representing 15%–30% of projected 2026 free cash flow, potentially narrowing the valuation gap and appealing to equity income funds.