Nvidia May Allocate $26–51B to Raise Dividend Yield to 0.5–1%
Nvidia trades at 26x 2026 earnings versus a peer average of 49x despite an expected $400 billion in free cash flow over 2026–27. Bank of America proposes a shareholder return program costing $26–51 billion to lift the dividend yield to 0.5–1%, aiming to narrow its valuation gap and attract income funds.
1. Current Valuation Gap
Nvidia trades at roughly 26x projected 2026 earnings, about half the peer average of 49x, and holds a market-cap-to-free-cash-flow multiple roughly 30% below comparable AI and Big Tech names despite forecasts of $400 billion in combined free cash flow for 2026 and 2027.
2. Bank of America Shareholder Return Proposal
Bank of America analysts recommend deploying $26–51 billion, or 15–30% of 2026 free cash flow, to raise the dividend yield from 0.02% to between 0.5% and 1%, arguing this could broaden Nvidia’s shareholder base, attract income-oriented funds, and help close its valuation discount.