IBM, Cisco and Nokia offer key technologies to enable AI while offering portfolio diversification to investors.
IBM has increased dividend payments for 30 consecutive years and is poised to push AI to the next level with its quantum computers.
Cisco is a leader in computer networks, which are vital to AI infrastructure, while Nokia’s AI efforts focus on wireless networks.
10 stocks we like more than Nokia ›
The hot field of artificial intelligence (AI) has an abundance of high-growth technology stocks, but those offering solid dividends are not as plentiful. Investing in dividend-paying AI companies is a great way to earn passive income while capturing a piece of the rapidly expanding AI market.
Three attractive AI stocks that offer attractive dividend yields are International business machines(NYSE: IBM), cisco systems(NASDAQ:CSCO)and nokia(NYSE: NOK). This trio not only generates dividend payments, but also gives investors exposure to different areas of the AI ​​ecosystem, providing diversification to an AI portfolio.
Read on to learn more about each company and why they make compelling investments in AI.
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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 increased 9% year over year to $16.3 billion. Its software division, which encompasses IBM’s artificial intelligence offerings, saw 10% year-over-year growth to $7.2 billion. Sales in its infrastructure segment soared 17% year over year to $3.6 billion as new IBM z17 servers, designed specifically for AI, experienced the strongest launch in Z system history.
IBM’s 2.2% dividend yield is excellent among AI stocks. Compare this to the leader in AI semiconductor chips NVIDIAoffering an anemic 0.02% yield. And Big Blue’s dividend is only getting better. In 2025, the company increased its dividend payout for the 30th consecutive year.
The conglomerate could see its shares soar in 2026 as a result of its quantum computing technology. In November, IBM announced that it would achieve quantum advantage by the end of 2026 and fault tolerance by 2029.
Quantum advantage is the point at which a quantum computer can solve real-world problems more accurately, economically, 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 technology capable of powering AI, as quantum devices can perform calculations beyond the capabilities of today’s most powerful supercomputers.
Cisco is known as a leader in computer networking. That strength is key in the era of artificial intelligence with the emergence of agent AI.
Chuck Robbins, CEO of Cisco, explained why: “The next phase of AI, powered by autonomous agents in constant interaction, will create unprecedented demand for faster, smarter and more secure networks.” Cisco is well positioned to meet customer needs in these areas with its new products.
Its Nexus HyperFabric product combines Cisco networking services with Nvidia’s advanced computing and artificial intelligence software to enable a customized technology infrastructure 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 growth in revenue to $56.7 billion in Cisco’s fiscal 2025, which ended July 26. This momentum accelerated in the fiscal first quarter, 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 between $60.2 billion and $61 billion.
The company’s 2.1% dividend yield puts it on par with IBM. The networking giant has steadily increased its dividend since 2011.
Nokia offers a dividend yield of 2.5%, making it the highest of this trio. The company entered the AI ​​spotlight thanks to a new partnership with Nvidia, announced on October 28.
Nvidia will invest $1 billion in Nokia as it transitions mobile networks from 5G to AI-enabled 6G. Nokia is betting on artificial intelligence radio access network (AI-RAN) technology. AI-RAN is designed to support the anticipated increase in cellular network traffic due to the use of AI.
Nokia CEO Justin Hotard, who took the top spot in February to lead Nokia’s AI approach, highlighted the importance of this deal, saying: “Our partnership with Nvidia… will accelerate AI-RAN innovation to put an AI data center in everyone’s pocket.”
AI-RAN development is happening rapidly. In 2026, the telecommunications giant T-Mobile will begin testing Nokia’s AI-RAN.
Nokia has struggled in recent years, seeing a 9% year-on-year drop in sales in 2024 to €19.2 billion, but 2025 is a different story. During the first three quarters of the year, the company saw 4% year-on-year revenue growth to €13.8 billion, with strong year-on-year sales growth of 12% to €4.8 billion in the third quarter.
The tailwind of the expanding AI market, combined with excellent dividend yields, make IBM, Cisco and Nokia excellent companies to generate a return on your AI investment.
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Robert Izquierdo has positions at Cisco Systems, International Business Machines, Nvidia and T-Mobile US. The Motley Fool has positions and recommends Cisco Systems, International Business Machines, and Nvidia. The Motley Fool recommends T-Mobile US. The Motley Fool has a disclosure policy.
3 Dividend-Paying AI Stocks to Buy in 2026 was originally published by The Motley Fool
