By Brian Sozzi
Publication Date: 2026-05-20 12:23:00
Maybe it’s time for Nvidia (NVDA) and CEO Jensen Huang to up cash giveaways to lure in new investors. It wouldn’t hurt to offer an enticement.
The news: Nvidia’s large position of 8.3% of the S&P 500 (^GSPC) index and 78% active fund management ownership often acts as a headwind to the stock, BofA analyst Vivek Arya wrote in a new note. Arya pointed out that other large-cap tech names in the same position have added incremental investors by boosting cash returns and appealing to dividend and income-oriented investors.
Nvidia hasn’t done this yet.
Based on Arya’s research, only 47% of Nvidia’s free cash flow from calendar years 2022 through 2025 has been allocated to dividends and stock buybacks, compared with peers that return around 80% of their free cash flow. Nvidia, instead, has plowed its cash into the AI ecosystem, investing in tech partners such as OpenAI (OPAI.PVT) and Anthropic (ANTH.PVT), which Arya believes has been “unfairly” characterized as risky circular/vendor financing.
“Boosting shareholder returns could expand ownership, close Nvidia’s valuation gap [relative to peers] and minimize circularity concerns,” Arya wrote.
AlphaSpace insights: Using Yahoo Finance’s AlphaSpace, what Arya is discussing becomes…
