These leading AI players all pay dividends to their shareholders.
Many companies retain all their profit to finance their expansion. However, some are so profitable that they have more money than they need to grow their businesses. That enables them to return some cash to their investors, which they can do by repurchasing shares and paying dividends.
Despite investing billions of dollars into artificial intelligence (AI), leaders such as Broadcom (AVGO 0.46%), Microsoft (MSFT 0.68%), and Meta Platforms (META 0.08%) all pay dividends. That enables investors to enjoy the best of both worlds. They get paid income while they’re capitalizing on that megatrend. While that income stream might be small now, it could grow more mighty in the future as these companies cash in on AI.
Not your average dividend
Broadcom makes a quarterly dividend payment of $0.53 per share to its investors. At its recent stock price of around $180, the semiconductor and software company has a 1.2% dividend yield. That’s about average, considering the S&P 500‘s dividend yield is around that level. At that rate, every $1,000 invested into Broadcom stock would generate about $12 of dividend income each year. The more you invest, the more income you can receive.
What’s noteworthy about Broadcom’s dividend is its growth. The company delivered its 13th consecutive dividend increase late last year, raising its payment by 14%. It has delivered incredible dividend growth during that timeframe:
AVGO Dividend data by YCharts
Broadcom should be able to continue growing its dividend at a brisk rate. The company’s revenue soared 43% year-over-year during the second quarter, while its free cash flow jumped 18%. Its acquisition of VMware was a big driver. However, it’s still growing rapidly without that accelerator, driven by a record $3.1 billion of revenue from AI products. Specifically, revenue was up 12% after excluding VMware. With more AI-powered growth ahead, Broadcom should be able to continue increasing its dividend at an above-average rate.
A smaller yield but mighty fine growth
Microsoft recently announced its latest quarterly dividend. The tech titan raised its payment by 10% to $0.83 per share each quarter. That puts its dividend yield at around 0.8% at its recent share price.
While Microsoft offers a low dividend yield, it has delivered a high dividend growth rate. It has increased its payment for 19 straight years, growing it at a more than 10% annual rate over the past decade.
Microsoft is in an excellent position to continue paying a growing dividend. The company has a low dividend payout ratio, enabling it to retain cash to grow its business and repurchase shares. Its board recently approved a new share repurchase authorization of up to $60 billion. Meanwhile, the company is investing heavily in AI, including pouring billions of dollars into ChatGPT creator OpenAI to gain access to that technology and help it deliver leading AI products and services. Those investments should continue growing its cash flow and ability to pay dividends.
New with lots of potential
Meta Platforms just started paying dividends this year. The social-media giant initiated a quarterly dividend of $0.50 per share in February. At its current stock price, it has a dividend yield of around 0.3%.
While Meta Platforms has a relatively new dividend and a low yield, it has lots of potential. The company is starting small so that it can invest heavily in AI. It launched its own AI assistant, Meta AI, earlier this year, which it expects will become the most used AI assistant by year-end. It’s also launching AI tools for advertisers, which CEO Mark Zuckerberg thinks “is going to be a very big deal.”
It will take some time for Meta to monetize some of its AI products. However, it has an excellent record of building, scaling, and then cashing in on its investments. Because of that, AI could be a tremendous long-term profit growth driver for the company. It should enable Meta Platforms to grow its dividend at a meaningful rate in the coming years.
Cash in on the AI boom
Many emerging AI companies need to retain all their profit so they can continue investing in the technology. However, Broadcom, Microsoft, and Meta Platforms are so profitable that they make enough money to invest in AI and pay dividends to their investors. They’re great AI stocks to buy for those seeking to collect some cash while capitalizing on this megatrend.
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Matt DiLallo has positions in Broadcom and Meta Platforms. The Motley Fool has positions in and recommends Meta Platforms and Microsoft. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
