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IBM, Cisco, and Nokia deliver key technologies to enable AI, while offering portfolio diversification for investors.
IBM has raised dividend payments for 30 straight years, and is poised to propel AI to the next level with its quantum computers.
Cisco is a leader in computer networking, which is vital for AI infrastructure, while Nokia's AI efforts are centered on wireless networks.
The hot field of artificial intelligence (AI) boasts an abundance of high-growth tech stocks, but ones offering robust dividends are not so plentiful. Investing in dividend-paying AI companies is a great way to gain passive income while capturing a piece of the rapidly expanding AI market.
Three compelling AI stocks that offer attractive dividend yields are International Business Machines (NYSE: IBM), Cisco Systems (NASDAQ: CSCO), and Nokia (NYSE: NOK). Not only does this trio deliver dividend payouts, but they also give investors exposure to different areas of the AI ecosystem, providing diversification to an AI portfolio.
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Read on for a deeper look into each company, and why they make compelling AI investments.
Image source: Getty Images.
IBM shifted its focus to artificial intelligence and cloud computing after Arvind Krishna became CEO in 2020. The move led to sales growth for Big Blue.
For example, in the third quarter, revenue rose 9% year over year to $16.3 billion. Its software division, which encompasses IBM's AI offerings, experienced 10% year-over-year growth to $7.2 billion. Sales in its infrastructure segment shot up 17% year over year to $3.6 billion as the new IBM z17 servers, designed specifically for AI, saw the strongest launch in the Z system's history.
IBM's 2.2% dividend yield is a great one among AI stocks. Contrast this with AI semiconductor chip leader Nvidia, which offers an anemic 0.02% yield. And Big Blue's dividend is only getting better. In 2025, the company raised its dividend payment for an impressive 30th consecutive year.
The conglomerate could see its stock soar higher in 2026 as a result of its quantum computing technology. In November, IBM announced it would reach quantum advantage by the end of 2026 and fault tolerance by 2029.
Quantum advantage is the point where a quantum computer can solve real-world problems more accurately, cheaply, or efficiently than conventional computers. A fault-tolerant quantum machine can correctly complete calculations, which is a challenge today because all quantum computers are sensitive to computational errors.
Achieving these milestones would give IBM tech capable of supercharging AI, since quantum devices can perform calculations beyond the abilities of today's most powerful supercomputers.
Cisco is known as a leader in computer networking. That strength is key in the artificial intelligence era with the rise of agentic AI.
Cisco CEO Chuck Robbins explained why, stating, "The next phase of AI, driven by autonomous agents in constant interaction, will create unprecedented demand for faster, more intelligent, and more secure networks." Cisco is well positioned to meet customer needs in these areas due to new products.
Its Nexus HyperFabric product combines Cisco's networking services with Nvidia's advanced computing and AI software to enable tech infrastructure customized for artificial intelligence. Its Cisco Hypershield offering is "the first truly distributed, AI-native cybersecurity solution," according to the company.
These AI-focused offerings contributed to 5% year-over-year revenue growth to $56.7 billion in Cisco's 2025 fiscal year, ended July 26. This momentum accelerated in fiscal Q1, which ended Oct. 25, with sales increasing 8% year over year to $14.9 billion. Cisco expects revenue to continue rising in fiscal 2026, forecasting a range of $60.2 billion to $61 billion.
The company's 2.1% dividend yield puts it on par with IBM. The networking giant has consistently raised dividends since 2011.
Nokia offers a 2.5% dividend yield, making it the highest among this trio. The company was thrust into the AI limelight thanks to a new partnership with Nvidia, announced Oct. 28.
Nvidia will invest $1 billion in Nokia as it moves to transition mobile networks from 5G to AI-supported 6G. Nokia is pursuing artificial intelligence radio access network (AI-RAN) technology. AI-RAN is built to support the anticipated increase in cellular network traffic from the use of AI.
Nokia CEO Justin Hotard, who took over the top spot in February to lead Nokia's AI focus, outlined the significance of this deal by stating, "Our partnership with Nvidia ... will accelerate AI-RAN innovation to put an AI data center into everyone's pocket."
The development of AI-RAN is happening quickly. In 2026, telecom giant T-Mobile will begin testing Nokia's AI-RAN.
Nokia has struggled in recent years, seeing a 9% year-over-year decline in 2024 sales to 19.2 billion euros, but 2025 is a different story. Through the first three quarters of the year, the company experienced 4% year-over-year revenue growth to 13.8 billion euros, with strong 12% year-over-year sales growth of 4.8 billion euros in Q3.
The tailwind from the AI market's expansion combined with excellent dividend yields make IBM, Cisco, and Nokia great companies to deliver a return on your AI investment.
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Robert Izquierdo has positions in Cisco Systems, International Business Machines, Nvidia, and T-Mobile US. The Motley Fool has positions in and recommends Cisco Systems, International Business Machines, and Nvidia. The Motley Fool recommends T-Mobile US. The Motley Fool has a disclosure policy.
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