Top 10 Best Dividend Stocks on Robinhood

Page 9 of 9

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 279

Microsoft Corporation (NASDAQ:MSFT) is an American multinational tech giant. The launch of DeepSeek’s R1 model has raised concerns for Microsoft, which has significant investments in OpenAI, the developer of the O1 series. However, the company’s CEO, Satya Nadella, known for his ability to pivot strategically, could turn this challenge into an opportunity. Nadella has previously embraced open-source strategies, such as adopting Chromium for Edge and expanding GitHub Copilot to support multiple AI models. In a market where AI is becoming increasingly commoditized, Microsoft’s Azure cloud platform could adapt by offering open-source models as APIs, integrating more cost-effective models like R1 into its offerings while maintaining appeal for enterprise customers. Although there may be short-term obstacles if OpenAI faces difficulties, Microsoft’s adaptability could position Azure as a leading player in the long run, even in a market with slimmer margins.

In fiscal Q2 2025, Microsoft Corporation (NASDAQ:MSFT) reported revenue of $69.6 billion, which showed a 12% growth from the same period last year. The company’s net income of $24.1 billion increased by 10% on a YoY basis. Microsoft 365 Commercial products and cloud services revenue grew by 15%, fueled by a 16% increase in Microsoft 365 Commercial cloud revenue.

Microsoft Corporation (NASDAQ:MSFT) also reported a strong cash position, ending the quarter with over $17.4 billion available in cash and cash equivalents. The company also generated $22.2 billion in operating cash flow, up from $18.8 billion in the prior-year period. It also returned $9.5 billion to investors through dividends and share repurchases. The company currently pays a quarterly dividend of $0.83 per share and has a dividend yield of 0.80%, as of January 30. It is one of the best dividend stocks on Robinhood with 19 consecutive years of dividend growth under its belt.

At the end of Q3 2024, 279 hedge funds tracked by Insider Monkey held stakes in Microsoft Corporation (NASDAQ:MSFT), the same as in the previous quarter. These stakes have a total value of more than $91 billion. Among these hedge funds, Bill & Melinda Gates Foundation Trust was the company’s leading stakeholder in Q3.

Overall Microsoft Corporation (NASDAQ:MSFT) ranks first on our list of the best dividend stocks on Robinhood. While we acknowledge the potential for MSFT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stock To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.

Page 9 of 9