Tech investors have increasingly turned to artificial intelligence (AI) stocks for growth, but some of these companies also offer attractive dividends. IBM, Digital Realty Trust, and Cisco Systems stand out as they provide both income and stock price growth through AI-driven advancements.
IBM has revitalized its business by focusing on cloud services and AI technologies, such as its watsonx platform and Granite foundation models. The company boasts a 31-year streak of dividend increases, with a current yield of 2.7%. Despite slower growth, IBM's strong free cash flow and attractive valuation make it a compelling buy.
Digital Realty Trust, a real estate investment trust (REIT) operating data centers, benefits from the surging demand for data center capacity. It offers a dividend yield of 2.9% and has seen significant revenue growth, nearly doubling from its 2023 low. The company's strong financials suggest it can sustain its payouts while continuing to expand.
Cisco Systems has also capitalized on the AI infrastructure boom, with its networking and silicon offerings in high demand. The company's dividend has grown annually since its introduction in 2011, currently yielding 1.6%. Cisco's strong revenue growth and attractive forward P/E ratio make it an appealing option for AI investors.