By Daniel Foelber, The Motley Fool
Publication Date: 2026-05-24 13:25:00
Don’t let Nvidia‘s (NASDAQ: NVDA) 1.7% decline on May 21 fool you. The chip giant’s first-quarter fiscal 2027 report was every bit of a showstopper, featuring $81.6 billion in quarterly revenue — a 20% quarter-over-quarter and 85% year-over-year increase. Even more impressive is that Nvidia converted a mind-numbing 65.6% of its revenue into operating income in the period ended April 26.
Despite its behemoth size, Nvidia is defying the laws of business physics by maintaining a breakneck top- and bottom-line growth rate, which is leading to more cash flow than Nvidia needs to reinvest in its business.
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As a result, Nvidia’s board of directors approved an additional $80 billion share-repurchase authorization and announced a massive increase in its quarterly dividend from $0.01 per share to $0.25 per share. Here’s why Nvidia’s dividend increase makes it even more of a screaming buy now.
Nvidia’s dividend increase makes perfect sense
In March, I correctly predicted that Nvidia would make a substantial dividend increase in 2026 based on comments from CFO Colette Kress at the company’s GTC 2026 conference. Kress said that Nvidia plans to return at least 50% of free cash flow (FCF) to shareholders through…
