3 "AI Income Machines" Leaving the Magnificent Seven in the Dust

For almost two years now, stocks that tap into the global $15.7 trillion AI revolution have surged so quickly, the media has a nickname for them: the "Magnificent Seven."

But there's a problem with the "Magnificent Seven"—the dividends that they offer investors are extremely stingy, as management prefers to devote hundreds of billions of dollars towards research and development.

Apple Inc. (AAPL), for instance, pays a dividend of just 0.5%. Microsoft Inc. (MSFT)'s dividend of 0.95% is well below the S&P 500 average of 1.29%. Nvidia Inc. (NVDA) pays just  0.03% dividend yield—not a typo—and Tesla Motors (TSLA) and Alphabet (GOOG) pay nothing at all.

But there's a little-known way to claim much bigger quarterly payouts from the AI revolution—thanks to three companies that collect billions of dollars in "rent" from the Magnificent Seven.

AI Income Machine No. 1: Prologis Inc. (PLD)

Headquartered in San Francisco, California, Prologis Inc. (PLD) is a real estate investment trust that leases over 1.2 billion square feet worldwide to some of the world's biggest names, including Amazon.

The company's business of leasing office and retail space to various tech firms is so lucrative, it has a profit margin of 37.4% as of Q3/2024. For context, Apple has a profit margin of 24%.

Not only that, but PLD is growing earnings at a robust clip. The company grew earnings by 34.5% last quarter, and was able to raise its dividend by 10.3% in 2024.

Since 2019, PLD has nearly doubled its dividend while increasing payouts every year. It now offers a 3.2% dividend yield that is more than double the S&P 500… and larger than the yields of all the "Magnificent Seven" stocks combined.

AI Income Machine No. 2: Alexandria Real Estate Inc. (ARE)

Headquartered in Pasadena, California, Alexandria Real Estate Inc. (ARE) is a company that leases 47 million square feet of office and retail space to companies in San Francisco, Boston, New York City, Austin, Seattle, and Washington D.C.

ARE has grown operating income by 299% since 2014—and it's no accident that its rise has been strongly correlated with the tech boom that's unfolded since.

ARE's string of lucrative deals in the tech sector contributed to its monster earnings growth of 592% last quarter—and helped it increase its dividend by 29% since 2019.

Alexandria Real Estate pays a yield of 4.8% as of this writing, which thrashes the average company on the S&P 500 and, like PLD, is a higher yield than that of all the Magnificent Seven companies combined.

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AI Income Machine No. 3: Digital Realty Trust (DLR)

As AI processors continue to demand ungodly amounts of power around the world, Digital Realty trust's modular designs to accommodate advanced cooling solutions are in strong demand.

DLR is a real estate investment trust that counts tech giants like Oracle, IBM, Meta, and LinkedIn among its clients—and by leasing property to these deep-pocketed titans, it has built a cash-gushing empire around the globe.

In fact, DLR now has a backlog of $859 billion, as tech giants jostle to use its global data center platform. The company has grown its dividend by 15% since 2019, and offers a 2.57% yield that is highly likely to grow in the years ahead.

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