Here's a Crash Course on Nvidia's Dividend (and Why It's So Small)

Core Viewpoint - Nvidia is focusing on reinvestment and share repurchases rather than providing substantial dividends, reflecting a strategic capital allocation approach aimed at supporting growth in the AI sector [2][4][5]. Dividend Policy - Nvidia's current quarterly dividend is $0.01 per share, translating to an annual dividend of $0.04, resulting in a negligible yield of approximately 0.02% [4]. - The company raised its dividend by 150% during the 10-for-1 stock split in May 2024 and has maintained this level since then [4]. - The payout ratio is near 1%, indicating that Nvidia is only distributing about $0.01 of every dollar earned, allowing for significant flexibility in funding growth [5]. Share Repurchases - Nvidia primarily returns cash to shareholders through share repurchases rather than dividends [6]. - In August 2025, the board authorized an additional $60 billion for buybacks, and in the first half of fiscal 2026, Nvidia returned $24.3 billion through buybacks and dividends [7]. - The company has consistently deployed billions of dollars per quarter on repurchases, supported by increasing free cash flow [7]. Future Expectations - Future dividend policy will be influenced by investment needs and earnings power, with significant investments required for AI platform development [8]. - The company is expected to continue prioritizing stock buybacks while gradually increasing dividends from a low base, maintaining flexibility in capital allocation [9]. - While modest dividend increases are probable, the timing and magnitude remain uncertain, as the company focuses on growth opportunities [10]. Financial Performance - Nvidia reported a 56% year-over-year revenue increase for the quarter ending July 27, 2025, with guidance indicating further revenue growth [11]. - The company's rapid scaling supports both reinvestment and potential for rising shareholder returns, with significant repurchases expected to continue [11].