The artificial intelligence (AI) market is taking off, providing a significant tailwind for several growth-oriented companies. However, that doesn't mean income-seeking investors can't get in on the act. Several AI leaders, including Nvidia, Alphabet, and Meta Platforms, pay dividends. Which stock provides the best combination of AI-related growth and an attractive dividend program? In my view, the answer to that question is Microsoft (NASDAQ: MSFT). Read on to find out why.

Microsoft's dividend profile

Of the top tech companies benefiting from the rapid rise in AI, several don't pay dividends or have been doing so for less than three years. Amazon is in the former category, while Alphabet and Meta Platforms are in the latter.

That does not apply to Nvidia, but the chipmaker's dividend program isn't impressive. Its forward yield is 0.03%. In fairness, that's partly because the company's shares have been on fire lately, but investors can look at other things, including the fact that it isn't in the habit of raising its dividends every year. It recently hiked it significantly, so the total growth of its dividend per share over the past decade amounts to 370.6%.

However, Nvidia's quarterly dividend per share is a minuscule $0.01. How does Microsoft compare? It offers a much more attractive forward yield of 0.8%, raises its dividends regularly, and has increased its payouts by 167.7% in the past decade.

Microsoft's quarterly dividend per share of $0.83 is also far higher than those of its similarly sized tech peers, including Nvidia. Lastly, Microsoft's cash payout ratio is just under 30%, meaning the company has ample room to continue increasing its dividends. But can Microsoft's business support the payouts for a long time?

AI and beyond

Microsoft played a role in the ongoing AI gold rush that started with ChatGPT. The tech giant invested in OpenAI, the company behind ChatGPT, back in 2019. Following the chatbot's success, Microsoft doubled down and deepened its relationship with OpenAI. But that's only part of the company's involvement in this niche, and perhaps not the more important part. Microsoft offers a suite of AI-related services through Microsoft Azure, its cloud computing division.

With most companies now seeking at least some of these services, business is booming. In its latest period, the fourth quarter of its fiscal year 2024 (ended June 30), Microsoft noted that Azure continues to be one of its fastest-growing segments. Microsoft's total revenue increased by 15% year over year to $64.7 billion. Azure's revenue was up 29% compared to the year-ago period. But how much did AI contribute to that performance? According to management, quite a bit.

Speaking of the cloud market and Azure in particular, CEO Satya Nadella said during the company's earnings conference call, "Our share gains accelerated this year driven by AI." This business should continue to provide a major tailwind for Microsoft since AI and cloud computing are both on a growth path. Although these likely represent the tech giant's biggest growth opportunities, there is more to its business. Microsoft remains the runaway leader in the computer operating systems market. It is also a leading player in gaming.

The company benefits from a solid moat from multiple sources. Consider the switching costs associated with its suite of productivity tools (Excel, Word, Teams, etc.). Businesses that rely on these products won't easily jump ship for fear of disrupting their day-to-day activities. Microsoft also carries one of the most valuable brand names in the world, another potent competitive edge.

Microsoft is an innovative company that generates plenty of cash flow and boasts a robust balance sheet, as its AAA rating from Standard & Poor's -- a higher rating than the U.S. government -- confirms.

With Microsoft, investors can get both income and growth, AI-related or otherwise.

Should you invest $1,000 in Microsoft right now?

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Prosper Junior Bakiny has positions in Amazon and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Here's My Top Artificial Intelligence (AI) Stock for Dividend Investors was originally published by The Motley Fool