Microsoft's Azure grew 40% and Broadcom's AI semiconductor revenue surged 143%, funding consecutive dividend raises despite both stocks yielding under 1%.
Visa more than doubled its quarterly dividend from $0.30 to $0.67 since 2020, with analysts targeting $401 against a current price of $358.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Microsoft didn't make the cut. Grab the names FREE today.
Chasing yield is a rookie mistake. The dividend stocks that actually build wealth are the ones raising payouts fast enough to outrun inflation, fund reinvestment and turn a modest starting yield into a serious income stream a decade later. That is the lens for July 2026: Three sub-3% yielders whose dividend growth rates make the compounding case, regardless of the modest headline yields.
Each of the three names below has a concrete catalyst behind the raise: AI-driven earnings acceleration at Microsoft, a payments network compounding double-digit revenue growth at Visa, and Broadcom's post-VMware cash flow explosion. For dividend-growth investors focused on total return, the compounding math is the entire thesis. (For readers building the income side of the portfolio, our Never Touch the Principal research goes deeper on the dividend-growth playbook.)
Microsoft (NASDAQ:MSFT) is the AI dividend grower hiding in plain sight. The company raised its quarterly payout from 83 cents to 91 cents starting Q4 2025, following a multi-year cadence of September raises: 62 cents to 68 cents in 2022, 68 cents to 75 cents in 2023, 75 cents to 83 cents in 2024 and now 91 cents. The forward annualized dividend stands at $3.64, with a current yield of just 0.93%. Small number, but the growth trajectory is the point.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Microsoft didn't make the cut. Grab the names FREE today.
The engine behind the raises is the AI and cloud franchise. Fiscal Q3 2026 delivered EPS of $4.27 versus $4.09 estimated, on revenue of $82.89 billion, up 18.3% year over year. Intelligent Cloud grew 30%, Azure grew 40%, and CEO Satya Nadella told investors, "Our AI business surpassed an annual revenue run rate of $37 billion, up 123% year-over-year." Commercial remaining performance obligations nearly doubled to $627 billion. That backlog gives management the visibility to keep the dividend ladder going.
Risk: The stock has been rerated hard, down 17.17% year to date and 23.44% over the past year, while CapEx hit $30.88 billion in the quarter, up 84%. Free cash flow is being consumed by AI buildout, and the payoff timeline is not guaranteed. At roughly 23 times trailing earnings, though, the valuation reset has done a lot of work.
Source: Yahoo Finance Top News — This article was automatically imported from the source. Read full article at original source →
