Key Points
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The Vanguard Russell 1000 Value ETF now includes stocks traditionally viewed as growth stocks, such as Nvidia, which is evolving into a dividend growth company due to its substantial free cash flow (FCF) generation.
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Nvidia’s free cash flow returned to shareholders reached $26 billion in the last quarter, surpassing its goal of returning 50% of FCF.
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The company projects 70% revenue growth for fiscal 2028, with new technologies like the Vera Rubin platform expected to significantly contribute to its data center revenue.
As of July 31, the Vanguard Russell 1000 Growth ETF had a 14.6% weighting in Nvidia, compared to 7.6% in the Vanguard S&P 500 ETF. Nvidia is expected to have a revised allocation in both the Vanguard Russell 1000 Growth and Value Index after the upcoming index shake-up in December.
Nvidia is diversifying its customer base beyond hyperscalers and recently announced a $500 billion AI capital financing deal to enhance its market presence. This move reflects a strategic transition for Nvidia, positioning it as a key contributor to AI infrastructure, contributing to sustained revenue growth and shareholder returns.
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