Forget NVDA: These 2 AI Stocks Have 10x Potential and Pay Dividends

A Better Path to Growth and Profits

Artificial Intelligence (AI) is revolutionizing industries, from healthcare to autonomous vehicles, driving unprecedented demand for advanced chips and infrastructure. Nvidia (NASDAQ:NVDA) has dominated the AI narrative, with its GPUs powering machine learning and data centers, delivering staggering returns for investors. Its stock has soared, fueled by AI’s explosive growth, making it a darling of Wall Street. 

However, NVDA’s valuation is sky-high, and it offers a negligible dividend of $0.04 per share annually that yields just 0.02%. It leaves income-focused investors wanting more. While NVDA remains a powerhouse, its lack of meaningful dividends and lofty price-to-earnings ratio prompts a search for alternatives. 

Enter two under-the-radar AI stocks that not only ride the AI wave but also pay dividends, offering a rare blend of growth and income. While NVDA has great potential to generate exceptional returns for investors, these two AI stocks pay dividends and have the potential to 10x in value, making them compelling picks for savvy investors.

Taiwan Semiconductor Manufacturing (TSM)

Taiwan Semiconductor Manufacturing (NYSE:TSM) is the world’s leading semiconductor foundry, producing chips for AI leaders like Nvidia, Advanced Micro Devices (NASDAQ:AMD), and Apple (NASDAQ:AAPL). 

TSM’s advanced manufacturing processes, including 3 nanometer (nm) and 2nm technologies, make it indispensable to the AI ecosystem, as its chips power cutting-edge AI models and data centers. 

In 2024, TSM reported a 30% year-over-year revenue increase to $90 billion, driven by soaring AI chip demand. Revenue rose another 35% in Q1, indicating that demand is accelerating. Its global expansion, with new fabrication plants in the U.S., Japan, and Europe, addresses geopolitical risks and enhances production capacity to meet growing needs. 

TSM’s forward P/E ratio of around 21, lower than NVDA’s 29, suggests substantial room for valuation growth. The company offers a dividend yield of approximately 1.2%, supported by strong, consistent cash flows and a shareholder-friendly policy. 

Analysts project AI chip demand to grow at a 28% to 38% CAGR through 2030, and TSM’s unmatched scale and technological leadership position it to capture a significant share of this market. Furthermore, TSM’s investments in R&D ensure it stays ahead in next-generation chip technologies, reinforcing its long-term growth potential. 

For investors seeking AI exposure with income stability, Taiwan Semiconductor’s combination of innovation, global reach, and dividends makes it a standout choice with the potential for 10x returns.

Broadcom (AVGO)

Broadcom (NASDAQ:AVGO) is a semiconductor and software powerhouse, critical to AI infrastructure through its high-performance networking chips and enterprise software solutions. Its chips enable the high-speed connectivity required for AI workloads in data centers, while its acquisition of VMware has strengthened its AI software offerings. 

In 2024, Broadcom’s AI-related revenue jumped 220%, fueled by demand for custom silicon and networking solutions from hyperscalers like Google and Meta Platforms (NASDAQ:META). Trading at a forward P/E of around 33, Broadcom carries a premium, but it is worth it considering its long-term growth prospects. 

Its dividend yield of 1.3% is robust, backed by a decade of consistent dividend increases — averaging a compound growth rate of 34% annually — making it a favorite among income investors. 

Broadcom’s diversified portfolio, spanning semiconductors and software, provides resilience and multiple revenue streams in the AI-driven market. Industry forecasts estimate AI infrastructure spending will surpass $6 trillion by 2030, and Broadcom’s strategic partnerships and innovation pipeline position it to capitalize on this trend. Its focus on custom AI accelerators and software integration enhances its competitive edge in the enterprise AI space. 

For investors seeking explosive AI-driven growth with the stability of dividends, Broadcom offers a compelling opportunity with significant upside potential, potentially delivering 10x returns over the long term.