If you’re in your 20s or 30s (or even 40s and 50s) and you love diving into the latest AI breakthroughs or cloud innovations, you’re probably used to chasing 100% growth stocks.

But here’s a game-changer:

Tech giants are now blending their explosive upsides with steady and reliable dividends, allowing you to get paid while your portfolio grows at the same time.

Now THAT’S total return.

This recent shift (if you want to call it that), is perfect for us tech-savvy retail investors who want to build wealth without sacrificing the thrill of high-growth sectors like AI, cloud computing and semiconductors.

In todays post, we’ll break down why this is happening and highlight some key players in the space while providing you with some tips to navigate it all.

Tech companies are starting to mature into cash machines. After years of them reinvesting every dollar they earned back into R&D and expansion, companies like Microsoft, Nvidia, Alphabet (Google) and Meta are sitting on mountains of free cash flow and have started increasing their dividend payments to attract a broader base of investors, including income-focused funds.

It appears the “dividends are for old people” camp have now been silenced.

Those same people would say:

“Don’t focus on dividends, you’re giving up growth. You’d be better off focusing on growth and switching to dividends later on or else you’ll underperform the market”.

Ya, right…

The shift from “growth focused” to “growth + dividend focused” shows that these tech giants have officially won the race on tech and business models, allowing them to not only provide high upside growth but also reward their shareholders with cash flow during an AI boom.

Now that’s a combo I can get behind.

With global AI spending expected to increase at rates we’ve never seen before, these payouts add a level of safety for retail investors in volatile markets.

Take Microsoft $MSFT ( ▼ 4.95% ) for example, a company that is no stranger to paying dividends (since 2003) and currently boasts 24 years of dividend increases.

It’s current annual payout sits at ~$3.64/share with a yield of 0.85%. The best part? Their payout ratio is at a healthy 22%, which means 22% of the companies earnings are paid out in dividends.

If you’re a growth investor, you’re probably thinking “why wouldn’t they just reinvest that cash back into the company for growth?”

The reason: A good investment runs deeper than just “growth”. As I mentioned earlier, tech giants are starting to pay dividends to attract broader retail investment as well as income-focused fund investment. This is a good thing because investors now feel “rewarded” while holding onto tech stocks that trade in an extremely volatile market. Why would you not want to be paid while you wait? Whether that stock is up, down or trading sideways, those dividend checks continue to roll in providing you with a margin of safety in a risky sector. That’s the cream of the crop.

Now take Nvidia $NVDA ( ▼ 1.33% ), the AI chip king in semiconductors, who offers a very tiny dividend of $0.04/share per year (0.02% yield). You might think to yourself “why is that worth it?” and the answer is simple… Nvidia has a payout ratio of ~1%, which means its currently prioritizing reinvestment in data centers and next-gen GPUs, but there is tons of room to grow that dividend over the next decade, especially with $77 billion of free cash flow, so investors who currently own the stock can expect growth and a juicy increase of yield on cost if they hold long term. This is perfect for balancing growth in a sector prone to cycles.

Alphabet $GOOG ( ▼ 0.6% ) joined the dividend party in 2024, now paying $0.84/share and boasts a 0.25% dividend yield. The company has search dominance in the market and healthy cloud growth that generates massive amounts of cash flow. They currently sit on ~$73 billion of free cash flow with a payout ratio of just 8%, higher than that of Nvidia (1%) but nowhere close to Microsoft (22%).

All of these companies started paying dividends to utilize excess cash post high growth phases, drawing in another group of investors without slowing down their AI innovation.

Beyond these household name giants, there are companies like Broadcom $AVGO ( ▲ 0.8% ), Taiwan Semiconductor $TSM ( ▲ 1.53% ) and Cisco $CSCO ( ▲ 1.48% ) who offer yields between 0.78% - 2.09%. These are companies that offer high yields while also tapping into the AI market, perfect for younger investors looking for cash flow but also growth.

Check the payout ratio.

Aim to buy tech stocks paying out less than 40% of their earnings in the form of dividend to leave space for reinvestment. You never want to buy a stock paying out over 80% of their earnings, or worse, using debt to fund their dividends, that’s a big red flag.

Free cash flow should cover the dividends by 1.5x or higher (at minimum).

Microsoft and Cisco are veterans in this “growth/dividend” focused space, however companies like Google and Nvidia offer lower ratios but more sustainability long term.

Like any dividend portfolio, the key is in reinvestment.

Use DRIP to compound your earnings, or turn off DRIP and reinvest those dividends throughout your portfolio as you see fit, potentially reallocating that income towards hedges that help lower your exposure to risk.

Finally, focus on the dividend growth rate over yield.

Here are some 3-year dividend growth rates of the stocks mentioned above:

For deeper dives into building a tech dividend portfolio, including exclusive picks and strategies, head over to The Profit Zone Premium. Gain access to our exclusive community of investors all striving towards financial freedom, as well as my watchlists, buys and sells in real time and the ability to ask me any questions you want. We had a 64% return in 2025 and we’re expecting 75%+ in 2026. If you want to follow along, click here to upgrade. See you inside!

Stay dominant.

Alex (The Dividend Dominator)
Founder and CEO of Dividend Domination Inc.
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