BofA Pushes Nvidia Dividend Hike; CoreWeave, Nebius Stocks Up 65%-80%
Bank of America argues Nvidia’s P/E trades 50% below Magnificent Seven peers and could raise its dividend yield to 0.5%-1%, costing $26-$51 billion. CoreWeave, Nebius and Applied Digital have gained 65%, 80% and 37% this year while Alphabet plans $180-$190 billion in AI capex that may boost Nvidia chip demand.
1. BofA Dividend Recommendation
Bank of America analysts note Nvidia trades at roughly a 50% P/E discount to Magnificent Seven peers and generates a near-zero dividend yield of 0.02%. They propose raising the yield to 0.5%-1%, requiring $26-$51 billion of free cash flow to attract income-oriented investors.
2. AI Infrastructure Competitor Gains
CoreWeave, Nebius and Applied Digital have delivered year-to-date gains of 65%, 80% and 37% respectively as unprofitable AI infrastructure providers capitalized on strong growth projections. Their outperformance underscores competitive pressure on Nvidia’s market share and valuation multiples.
3. Alphabet AI Expansion Boosts Demand
Alphabet boosted its AI infrastructure capex guidance to $180-$190 billion, signaling sustained demand for chips and processors in data centers. Nvidia, as a leading supplier, stands to benefit from increased spending on AI hardware in 2026 and beyond.