By Brian Sozzi
Publication Date: 2026-05-21 12:22:00
Nvidia (NVDA) getting more generous with its cash payouts to shareholders could be great news for the stock, just like it was for another tech titan: Apple (AAPL).
The news: Nvidia said on Wednesday it would expand its capital return program. It hiked its dividend to $0.25 per share from $0.01. It also announced a new $80 billion stock buyback program on top of an existing $39 billion program left over from a prior authorization.
Executives said it plans to return 50% of its free cash flow to investors in calendar year 2026.
The analysis: Evercore ISI analyst Mark Lipacis said Apple is a solid case study for identifying potential catalysts for a price-to-earnings ratio rerating after several years of compression. In the chart below, Lipacis showed that after five years of compression, Apple’s P/E ratio began to expand as its capital returns program increased.
“We expect the same to occur for Nvidia,” Lipacis said, adding that the Jensen Huang-led AI chip darling could become even more generous with its returns program in 2027.
Don’t forget: Based on research this week from Bank of America analyst Vivek Arya, 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…