When it comes to artificial intelligence (AI) stocks, dividend returns aren’t typically what investors think of. Among technology stocks in the S&P 500 Index; approximately half do not pay a dividend at all. In general, these names tend to return more capital through buybacks.
This comes as firms in this sector focus on growth rather than providing income to investors. Companies legally have to pay dividends once they declare them, but no such requirement exists with buybacks. Thus, buybacks give tech companies more flexibility in balancing growth initiatives and shareholder returns.
