AI chipmaker Nvidia (NVDA 1.78%) managed to largely hold onto a sharp gain over the last 30 days when it reported earnings. Though the stock fell about 1.8% during the first trading day following its report, the stock is up 9.8% over the last 30 days. The quarterly numbers and the outlook for the period ahead were both exceptional. But tucked into the same release was a capital return announcement that quickly grabbed attention.
Nvidia said its board approved a 25-fold increase to the quarterly dividend, lifting it from $0.01 per share to $0.25. That works out to a 2,400% raise and puts the annualized payout at $1.00 per share. The board also approved an additional $80 billion in share repurchase authorization, on top of the $38.5 billion remaining at the end of the quarter.
But the dividend headline, eye-catching as it may be, wasn't even the biggest story in the report. The underlying business is growing at a pace that arguably makes the capital return look modest.
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A historic capital return
The new payout is still small relative to Nvidia's stock price -- the annualized dividend yields around 0.4% at recent levels. But the move says something about how the company is thinking about its swelling pile of cash. Nvidia generated about $48.6 billion of free cash flow during fiscal Q1, up from $26.1 billion in the year-ago quarter. And it returned a record $20 billion to shareholders during the quarter through buybacks and dividends -- the largest single-quarter capital return in the company's history.
Combined with what was left on the previous authorization, the new $80 billion brings Nvidia's total available repurchase capacity to nearly $120 billion. That is a meaningful sum even for a company the size of Nvidia. And it suggests that share repurchases, rather than the dividend, will continue to do most of the heavy lifting when it comes to returning cash to shareholders.
The bigger news
While the capital return announcement sounds great on paper, the more impressive part of the report was the underlying business -- and management's guidance for the period ahead.
Nvidia's fiscal first-quarter (the period ended April 26, 2026) revenue rose 85% year over year to $81.6 billion, and climbed 20% sequentially. Importantly, that 85% increase marked another step up in Nvidia's growth pace. From 56% growth in fiscal Q2 of 2026 to 62% in fiscal Q3, then 73% in fiscal Q4, and now to 85% growth, the company's year-over-year growth has now accelerated for three straight quarters.
Powering the quarter was Nvidia's data center segment, which delivered a record $75.2 billion in revenue, up 92% year over year. Notably, networking revenue within that segment soared 199% year over year to $14.8 billion -- nearly tripling from the year-ago quarter as customers built out ever-larger AI clusters.
And profitability scaled with the top line. Nvidia's non-GAAP (adjusted) earnings per share rose 140% year over year to $1.87, while adjusted gross margin expanded to 75% from 60.8% a year earlier.
NASDAQ: NVDA
Key Data Points
Then there's the outlook, which is even more impressive.
Management said it expects fiscal second-quarter revenue of $91.0 billion, plus or minus 2%. At the midpoint, that implies roughly 95% year-over-year growth -- an even faster pace than fiscal Q1. And notably, the company isn't assuming any data center compute revenue from China in that figure.
"[M]y sense is that we'll be supply constrained throughout the entire life of Vera Rubin," Nvidia CEO Jensen Huang said during the fiscal first-quarter earnings call, referring to the company's next-generation AI platform, which is set to begin shipping in the second half of this year.
Of course, the story still carries risks. Some major customers are designing their own chips, and the China business remains a wild card. Even so, for investors who believe we're still early in the AI build-out, the combination of a record capital return and reaccelerating growth could make this a reasonable time to start a small position in Nvidia stock.
