BofA Urges Nvidia to Boost Dividend Yield to 0.5%-1% at $26B-$51B Cost
Bank of America says Nvidia could lift its near-zero dividend yield to 0.5%-1% at a cost of $26B-$51B, or 15%-30% of 2026 free cash flow. Yet Nvidia trades at a 30% lower market cap-to-FCF multiple than Apple and Microsoft despite generating over $400B in 2026-27 FCF.
1. BofA Calls for Yield Increase
Bank of America analysts say Nvidia could lift its near-zero dividend yield to between 0.5% and 1% by allocating $26 billion to $51 billion, representing 15%-30% of projected 2026 free cash flow.
2. FCF and Valuation Gap
Nvidia is expected to generate over $400 billion in free cash flow during 2026 and 2027 combined, yet its market cap-to-FCF multiple trades about 30% below Apple and Microsoft.
3. Alphabet’s AI CapEx Boost
Alphabet raised its AI infrastructure capex guidance to $180 billion-$190 billion for 2026 with higher spending planned for 2027, presenting increased chip demand favorable to Nvidia’s data center business.
4. Oklo Partnership Expands AI Applications
The collaboration with Oklo and Los Alamos National Laboratory aims to apply Nvidia’s AI tools to accelerate advanced nuclear reactor simulations, though commercial milestones remain years away.