While Nvidia’s (NASDAQ: NVDA) main appeal in recent years has been the company’s stellar growth on the business and the stock market side, holders of NVDA shares had more to celebrate on October 3.
To be precise, the semiconductor giant paid out its quarterly dividend on Thursday to the tune of $0.010 per share.
This means that an investor who purchased $1,000 worth of Nvidia stock at the start of 2024 would have received approximately $0.20 on October 3 – just under one quarter.
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Simultaneously, the chipmaker’s CEO, Jensen Huang, who owns nearly 860 million NVDA shares – valued at about $105 billion at Nvidia stock’s price today of $122.96 – despite selling a significant quantity in recent weeks, received about $8.6 million.
Dividends aren’t Nvidia stock’s true strength
Though the semiconductor giant’s dividend yield is far from impressive, it is worth pointing out that the quarterly payments are neither the company’s focus nor its strength.
Indeed, Nvidia is mostly centered on growth and development, and the low per-share payments may have been partially designed to discourage income-focused investors.
On the other hand, traders seeking growth would have much more to celebrate in 2024.
While those $1,000 worth of shares purchased in January would have brought only 20 cents in dividends, they would have simultaneously more than doubled thanks to NVDA’s 155.26% year-to-date (YTD) stock market rise.
The numbers would be even more impressive for the longer-term Nvidia bulls.
For example, purchasing $1,000 worth of shares right before the company’s long rally started in late 2022 would have netted only a slightly greater dividend payment of $0.80, but the investment itself would have grown to about $10,200.
Why Nvidia stock investors likely have far more growth to look forward to
Nvidia investors also likely have far more to look forward to in the coming months and years. Not only is the demand for the new Blackwell chip ‘insane,’ according to CEO Huang himself, but the semiconductor giant now plans to revolutionize AI hardware infrastructure every year.
Indeed, the hope is that Nvidia will be able to increase the capacity of its products two or three times annually, thus rocketing the capabilities and slashing the operating costs of its customers.
Though ambitious, the semiconductor giant’s track record and the increased appetite for investment in AI infrastructure certainly make the plan feasible.
On the other hand, there remains a risk that the AI boom is, in fact, an AI bubble near its nursing point, and there are no guarantees that Nvidia will be able to maintain the pace of technological advancement it had set for itself.
Finally, Nvidia may soon face some headwinds due to U.S. regulatory pressure as the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) filed amicus briefs on October 2 in support of a lawsuit alleging hiding its cryptocurrency-related revenue.
Nvidia stock price chart
Whatever the future may hold, it appears that by October 4 2024, NVDA shares have woken up from their summertime slumber. The last 30 stock market days have seen Nvidia stock climb 15.61% and the last 5 trading days – though featuring some volatility – showcase the ongoing uptrend.
The latest rally comes after the chipmaker’s shares entered a multi-month period of volatility and sideways trading following the June stock split. The split itself came after a $2 trillion 2-year climb in Nvidia’s market capitalization.
