Dividend Growth Stocks Are the New Tech Stocks — Here’s Why

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For young, growth-focused investors, perhaps dividend growth stocks are a better pick-up at current levels, especially as the red-hot AI stocks consider their next moves going into the turbulent month of September.

Indeed, a market sell-off isn’t guaranteed to hit, just because we’re entering the scariest month of the year. And while stocks could certainly run into another correction, given the sheer momentum the tech scene has seen since ricocheting off April’s lows, I wouldn’t be so quick to rotate out of growth and into the kinds of boring value names that don’t have much to offer on the front of capital gains or dividend growth.

Some well-known mega-cap tech titans are unstoppable dividend growers

At the same time, many mature mega-cap tech titans have also become go-to sources of long-term dividend appreciation and capital gains. Indeed, most of the Magnificent Seven are as much beloved dividend growers as they are high-tech titans looking to win the AI race.

Of course, more capex going to AI efforts could mean less free cash flow to spoil investors. That said, I do think the mega-cap tech titans have the means to keep on growing while keeping the annual dividend hikes coming.

For young investors, dividend growth stocks aren’t just the new tech stocks. In many instances, they are the tech darlings we’ve already warmed up to over the years. In this piece, we’ll check in on a pair of high-tech stocks that can allow investors to achieve dividend growth and continued share price appreciation over time.

If you’ve got a shareholder-friendly management team and earnings are in the growth fast lane, you’ve got the formula for big and frequent dividend hikes. Indeed, without robust sales and earnings growth, it’s tough to really raise the bar on the payout.

Apple stock: A dividend growth gem that’s also poised for next-level (dividend) growth

Apple (NASDAQ:AAPL) has averaged an annual dividend growth rate in the 5-6% range. That’s quite respectable for a tech titan that’s still on the cutting edge of consumer hardware. While many folks have deemed Apple as less than innovative, as it seemingly fell behind in the AI race (is it at risk of falling further behind as its Mag Seven rivals pay more of a premium for AI tech talent?), I do view it as more of a steady consumer play that’ll keep on giving back to investors in the form of dividend increases.

While Apple is navigating a forgettable year with a lack of catalysts (Liquid Glass is about the most exciting thing from Apple in 2025), I do think we have all the drivers for a growth reacceleration in 2026.

Indeed, whether we’re talking about the much-awaited foldable iPhone, further advancements in Apple Intelligence (rumors suggest Siri could finally get useful next year), or a super-thin “Air” version of the iPhone, I do think relief could be on the way as CEO Tim Cook and company get through a tariff tensions, stalling growth, and a relative lack of AI firepower.

Apple is taking its time with AI. In the meantime, expect more steady dividend growth

Some speculate that Apple can acquire its way (is Perplexity AI on the market) back to the front of the pack in the AI race. Though it’s certainly one way, I do think that Apple has the means to pull ahead organically.

Furthermore, given Apple’s slow, steady, and deliberate approach to AI, it may be the Mag Seven member that’s spared should the AI trade be in for a seasonal plunge. In any case, Apple is swimming in free cash flow, with more than enough to fuel big buybacks and outsized dividend growth.

With plenty of catalysts to refuel growth in the new year and a less rushed approach to AI, I’m inclined to stick with the magnificent dividend grower. Whether you view Apple as a tech firm or a consumer products company, the dividend growth gem really stands out, especially as its shares flirt with a bear market once again.

In short, there’s more to Apple’s dividend than its small 0.5% yield. It’s a dividend grower that has the financial wiggle room to balance frequent (and generous) hikes, as it also allocates the right amount of capital to stay on the right side of the AI-driven growth track.

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