Nvidia Hands Shareholders $86 Billion as Rotation into Memory Chips Overshadows Fundamentals
Published on 06/26/2026 at 19:31 | Redaktion boerse-global.de
Nvidia is delivering a record payday to its investors, yet the stock continues to slide. The chip giant paid out roughly $6.055 billion in quarterly dividends on Friday — a 2,400% jump from the previous token distribution of $0.01 per share — while simultaneously authorizing an $80 billion share buyback program. The combined capital-return package of nearly $86 billion, approved at the June 24 annual meeting, marks a dramatic shift in payout policy. Management has committed to returning at least 50% of free cash flow through buybacks and dividends going forward, aligning Nvidia more closely with other Big Tech stalwarts.
But the generous distributions have done little to arrest the selling pressure. The stock fell 1.6% on Friday to $195.74 and slipped another 0.5% in after-hours trading to $194.77. On a monthly basis, the decline has widened to roughly 8%. In the prior week alone, Nvidia lost over 6%, dragging the shares to €170.76 in European listings — nearly 6% below the 50-day moving average and a long way from the all-time high of €202.50 set in May (or above $235 in U.S. trading from mid-May peaks).
Investors are rotating capital out of the dominant AI-chip supplier and into its ecosystem partners, particularly memory chip makers that are benefiting from the same AI boom. The trigger for this sector rotation was Micron Technology's latest quarterly results, which showed revenue quadrupling to $41.5 billion and earnings per share surging more than 1,200% to $25.11. High-bandwidth memory (HBM3e) has become the industry's bottleneck, and each Nvidia AI processor depends on these chips. Money is flowing into storage players like Micron and Sandisk as they capitalize on supply constraints, even though that capital is staying within the broader AI infrastructure theme.
Should investors sell immediately? Or is it worth buying Nvidia?
Analysts at Morgan Stanley, however, remain bullish on Nvidia's long-term trajectory. They project a 52% revenue increase in the AI data-center business by 2027, driven by rising demand for advanced chip-packaging from TSMC. Nvidia still commands an estimated 85% market share, and while hyperscalers are testing alternative suppliers, the experts expect only minimal erosion. "For large-scale projects, Nvidia remains the default choice," the note said.
On the product front, supply-chain sources in Taipei confirm that the transition to Nvidia's next-generation platform, code-named "Vera Rubin," is proceeding as scheduled. The production shift is expected to wrap up by the second quarter of 2026, with volume ramp starting in the third quarter. Vera Rubin is designed for trillion-parameter models and autonomous AI workflows, promising up to ten times more inference throughput per watt than current systems.
The technical picture has grown more precarious. The stock's relative strength index (RSI) stands at 39.9, approaching oversold territory. Should the price decisively break below $188, a deeper correction could follow; the 200-day moving average is viewed as the last line of defense for bulls. Nvidia's current market capitalization of roughly $4.82 trillion reflects the market's caution, and prediction markets now assign lower probabilities to a near-term return to record levels, partly because rental rates for GPU capacity have fallen noticeably since the May highs.
All eyes are now on late August 2026, when Nvidia will release its quarterly earnings. The fundamental narrative remains strong — massive capital returns, a dominant product roadmap, and insatiable demand for AI compute — but for now, sentiment-driven sector rotation is winning the tug-of-war.
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