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Sept. 14, 2024, 1:07 a.m.
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Top AI Dividend Stocks to Watch: Nvidia, Dell, and Meta

Brief news summary

The growing demand for artificial intelligence (AI) is set to create trillions in economic value, attracting investors to AI-related dividend stocks for reliable, long-term gains. Key players in this field include Nvidia, Dell Technologies, and Meta Platforms. Nvidia (NASDAQ: NVDA) has experienced a dramatic surge in revenue, more than doubling its figures due to heightened demand for its GPUs, essential for AI functions. With a solid history of dividend payouts and robust free cash flow, Nvidia stands poised for continued growth, particularly with an upcoming product launch. Dell Technologies (NYSE: DELL) may appear volatile, but it presents an attractive opportunity thanks to a recovering PC market and expansion in AI server solutions. Analysts forecast consistent earnings growth, potentially leading to increased dividends, with the stock currently yielding 1.68%. Meta Platforms (NASDAQ: META) has successfully utilized AI to boost its digital advertising revenue and has recently introduced quarterly dividends, showcasing its confidence in AI’s trajectory. As the AI landscape evolves, these stocks offer promising prospects for capital growth and increasing dividends.

The growing interest in artificial intelligence (AI) is projected to significantly boost the economy, adding trillions in value through productivity gains. Historical examples, such as early investors in companies like Microsoft and Intel during the PC boom, suggest that AI could yield similar returns for savvy investors. While AI growth stocks are numerous, it's also advisable to consider profitable AI companies that offer dividends, especially for those with a long-term investment strategy. Here are three promising AI dividend stocks: 1. **Nvidia (NASDAQ: NVDA)** Nvidia is capitalizing on the shift toward accelerated computing in data centers for AI applications. Its revenue more than doubled in the last quarter due to increased demand for its GPUs, essential for AI model training. The company plans to introduce its Blackwell computing platform, which will meet the escalating power requirements of future AI models. Nvidia has also been paying dividends for over a decade, recently increasing its quarterly payment by 150% to $0. 01 per share, reflecting its profitability. With $46 billion in free cash flow over the past year, Nvidia’s growth prospects suggest substantial future dividends along with potential share price appreciation. 2. **Dell Technologies (NYSE: DELL)** Dell's recent stock dip presents an opportunity for investors, particularly with expected recovery in the PC market and rising AI server demand.

Dell generates revenue from client solutions and its growing AI server business, which has seen a 38% increase in the past year. Despite current market challenges, analysts predict a 12% annual earnings growth for Dell, leading to increasing dividends. The company raised its quarterly dividend by 20% to $0. 445 per share, offering a forward yield of 1. 68%, above the S&P 500 average. 3. **Meta Platforms (NASDAQ: META)** Meta is thriving thanks to its profitable digital advertising bolstered by AI advancements. The company initiated its first quarterly dividend this year, highlighting management's confidence in ongoing AI investments. With a 22% revenue increase in Q2 and successful integration of AI in its platforms, Meta's advertising performance is improving. Its quarterly dividend stands at $0. 50 per share, translating to a 0. 4% forward yield, with expectations for double-digit earnings and dividend growth in the future. In conclusion, these stocks represent strong options for long-term investors, combining the growth potential of AI with the stability and returns associated with dividend payments. Additionally, potential investors should consider other top-recommended stocks for investment success. *Note: Analyst positions and other disclosures related to The Motley Fool are mentioned for transparency. *


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