AI Market: Rocket-like Growth and Dividend Potential

Artificial intelligence remains the star of the markets in 2024. In particular, Nvidia has benefited from this boom, recording an impressive price increase of almost 180 percent over the past twelve months until December 31. Growth forecasts for the AI sector are equally remarkable: Analysts expect the industry to rise from $184 billion in 2024 to over $826 billion by 2030. A clever investment strategy in this environment is to invest in companies that are not only active in the AI sector but also offer attractive dividends. However, AI stocks with dividends differ significantly among themselves. While Nvidia does distribute a dividend, the dividend yield is currently a meager 0.03 percent. Investors seeking AI companies with worthwhile dividends could consider looking at International Business Machines (IBM), Cisco Systems, and Verizon Communications. These companies not only offer solid dividends but also exciting growth prospects. IBM impresses with an enticing dividend yield of 3 percent and an impressive dividend history: The company has been paying quarterly dividends since 1916 and has been increasing them continuously for 29 years. Thanks to its strategic shift to cloud computing and AI in 2020, IBM was able to increase its revenue with generative AI by over $1 billion in the third quarter compared to the previous quarter. The company's vision for the future focuses on quantum computing, which has the potential to handle AI calculations at previously unimaginable speeds. Cisco plays to its strengths in the field of computer networks and benefits from the growing demand for robust and secure internet connections essential for the operation of AI systems. A 20 percent increase in product orders in the first quarter of the current fiscal year underscores this role. The company forecasts revenue of $55.3 to $56.3 billion for fiscal year 2025, which represents an increase compared to $53.8 billion in 2024.