As the so-called “greater power, greater responsibility”, the AI boom has created an astonishing increase in stock prices, and has also caused US tech giants with high market capitalization to face increasingly stringent market requirements: AI investment, corporate profits, repurchases, and dividends are all essential.

After years of rapid growth, the technology industry is entering a new stage of development. Some industry leaders such as$Alphabet-A (GOOGL.US)$,$Meta Platforms (META.US)$,$Salesforce (CRM.US)$und$Booking Holdings (BKNG.US)$Other companies announced quarterly cash dividends to shareholders this year.

Dividend distribution is traditionally seen as a sign that a company has reached maturity and focuses on returns to investors. For the tech industry, starting to pay dividends is significant. First, it conveys that after pursuing large-scale expansion, these companies have gradually turned to seeking to maximize profitability and cash flow. High cash reserves enable them to simultaneously pay dividends, repurchase shares, and continue to invest in research and development to achieve comprehensive shareholder returns.

Second, paying dividends helps attract the favor of value investors. Value investors value a company's long-term intrinsic value and shareholder return more than chase high-risk surges and falls. By introducing dividends, tech giants are undoubtedly sending a signal to the market that they have entered the era of value investment, becoming more attractive defensive long-term investment targets.

Third, analysts believe that due to the high barriers and outstanding profitability of the technology industry, the dividends paid by these companies are expected to continue to grow, thereby creating a higher return on investment for long-term investors. In the future, all tech giants may be required to pay dividends; otherwise, they will be viewed as having high operating risks and overvalued values.

ranging$Amazon (AMZN.US)$und$Tesla (TSLA.US)$Tech giants, including them, have yet to join the dividend distribution ranks. Amazon CFO Brian Olsavsky previously said during an earnings call that the current focus is on debt repayment and capital expenditure investments rather than shareholder returns. Tesla also said it has no plans to pay dividends in the foreseeable future. But if tech stocks pay dividends as a general trend, Amazon and Tesla won't be able to stand alone.

As far as the size of dividends is concerned, tech giants are relatively cautious and restrained. In the case of Google and Meta, their dividend rates are only around 0.2% and 0.5%, respectively, which is far below$S&P 500 Index (.SPX.US)$The average value of the constituent stocks was 1.37%.$NVIDIA (NVDA.US)$Furthermore, the dividend rate is only 0.02%, and it hasn't increased since 2018. Last year, Nvidia's operating cash flow reached 28 billion US dollars, but the total dividend payout was less than 400 million US dollars, and the dividend was only 4 cents per share. No, Nvidia bought back $9.5 billion of shares last year.

The increase in dividend yields needs to be gradual.$Microsoft (MSFT.US)$The dividend rate is currently 0.7%, but in the past 20 years, the total return from investors holding shares has exceeded 2,400%, far higher than the 1,500% increase in the stock price itself.

Stock buybacks are still the main way tech giants pay cash to shareholders. Since this year, the US stock “Seven Sisters” has spent a total of 58.5 billion US dollars to buy back stocks, which is more than 5 times the amount of dividends paid. These companies believe that instead of spreading large amounts of capital among all shareholders, it is better to concentrate on buying back a few stocks and increasing earnings per share, thereby raising the overall stock price level.

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