Although neither NVIDIA (NVDA 1.00%) and neither Apple (AAPL 0.20%) Primarily famous for its dividend payouts, both have been remunerating shareholders over the years. Not only this, but each has increased these payments by more than several times.
This month, both companies announced dividend increases. Let’s take these apart and see if they support a buy case for two very high-profile tech stocks.
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1. Nvidia
Now it Dividend is increasing. A typical delivery increase is a relatively modest, even incremental, improvement measured in single-digit percentages. That’s certainly not the case with Nvidia, which has increased its quarterly dividend 25-fold from $0.01 per share to $0.25.
The company expanded its existing share repurchase program to $80 billion with no end date. This adds to the remaining $38.5 billion under authorization in the initiative.
nvidia, king of Artificial Intelligence (AI) Chips are doing gangbusters in this age of AI. Its recent financials reflect its front-and-center position: revenue grew 85% year over year to $81.6 billion in Q1FY27, while headline net income more than tripled to $58.3 billion. The latter, meanwhile, makes a whopping net margin of 71%.
Despite those big jumps in the financial sector, analysts expect both things to only outperform rather than weaken. This disappointed the market, with the share price rising significantly before the results were published. Unsurprisingly, Nvidia’s stock pulled back and hasn’t recovered much yet.
I don’t think it will stay down for long. Yes, Nvidia is expensive based on where its stock was a few months ago, and some of its valuations are reaching vertigo-inducing levels (like price-to-sales, which is around 21). Additionally, other chip makers are attempting to snatch some share from the industry leader and may also be successful in areas that Nvidia is not currently addressing.
That said, Nvidia is still the biggest game in town when it comes to AI processors, and without such hardware, we can say goodbye to ChatGPIT, Gemini, and all the other models we know and depend on. Given this, I think Nvidia is undoubtedly a buy, even at these extreme levels. In my opinion, this is a very safe bet on the huge and bright future promised by AI, where it can be done without thinking.
Nvidia’s recent dividend increase should boost the stock’s yield significantly, although that’s not saying much. At the latest closing share price, this would be less than 0.5%. Still, I don’t think it’s a factor in how investors view Nvidia, because what they’re buying with the stock is strong, continued fundamental growth potential.
2. Apple
One of those long-standing names among fellow AI chip developers technique Hardware world, Apple. The Cupertino giant is similarly doing the dividend-raising dance, announcing its fiscal second-quarter earnings along with a 4% increase in the quarterly payout to $0.27 per share.
Apple Despite the emphasis on AI processors, Nvidia is not. The management has said that it is developing such products solely for its own use. This will, of course, help the performance of the devices around which the company still revolves after so many years (the foundational iPhone will celebrate its 20th anniversary next year).
This is certainly encouraged by the recent astonishing surge in sales of these items. Apple separates its revenue streams into products and services; The company grew at double-digit percentage rates in both quarters of this financial year compared to the previous quarter, with services growth in both cases slightly up. Earlier, it was significantly lagging behind other categories.
But this could be a short-term growth spurt. A major factor in the sales surge was future-proofing, as the company’s AI platform, Apple Intelligence, requires devices equipped to handle its capabilities. This does not include all models, including the Pro and Pro Max versions of the iPhone 15. So the upgrade cycle has been quite a boon for Apple since the iPhone 17 hit the market last September.
I think this inspiring increase in products will cool down soon. Happily, Apple has done a good job of pushing the services end of the revenue equation, thanks to an ecosystem that can include every imaginable type of app and multiple device functions. Many of us do an increasing amount of work on our phones, and this trend should only continue to grow.
Like Nvidia, Apple is a giant company with a $4.5 trillion market capitalization and $416 billion in annual sales. I don’t think it has the development potential of leading Nvidia; Still, its top and bottom lines will generally continue to grow, that’s for sure. Of the two stocks, I’m more excited to own Nvidia; However, Apple must perform well for investors as well.
Apple’s new payment – first released on May 14 – receives the same 0.3% as Nvidia. And similar to the chipmaker, it’s a safe bet that some people invest in this stock for the dividend. That said, Apple has announced dividend increases every consecutive year since it reinstated its payout in 2012 after a 17-year hiatus.