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Image source: Getty Images. <\/p>\nRetirees tend to prioritize relatively stable, reliable investments that also provide consistent income. That hardly describes the top artificial intelligence (AI) companies, many of which are growth-oriented tech stocks that are fairly volatile and whose dividend programs (even when they have one) aren’t particularly impressive. That said, there is one AI stock that stands out above the rest as the most attractive for retirees. That’s none other than Microsoft (NASDAQ: MSFT). Here is why. <\/p>\n
Image source: Getty Images. <\/p>\n
Will AI create the world’s first trillionaire?\u00a0Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need.\u00a0Continue \u00bb<\/a><\/p>\n First, let’s discuss several of the reasons Microsoft is a leading AI company. The tech leader<\/a> offers a host of AI services through its Azure platform, including tools that enable corporations to build custom AI tools without the expensive investment required to train AI models from scratch. It also helps that Microsoft already has a large distribution channel in place. Microsoft has been an integral part of the day-to-day activities of millions of businesses for decades through its operating systems (OS) and productivity platforms. It’s not a leap for the company to rely on these existing relationships to advance its AI agenda. <\/p>\n Then there is Microsoft’s integration of AI tools into its OS via Copilot, as well as its partnership with OpenAI, which remains a market leader. Beyond its AI business, though, Microsoft’s large, established base of customers who use its OS and productivity tools daily — as well as its cloud computing<\/a> services — provides it with a significant source of predictable revenue, much of it from enterprise contracts, resulting in recurring sales. This is precisely what makes Microsoft a better pick for retirees than some other AI leaders that rely on advertising or e-commerce, businesses that suffer meaningfully during recessions.<\/p>\n Microsoft won’t escape an economic downturn completely unaffected. Hardly any company can pull that off. But the tech giant should navigate one better than most of its similarly sized tech peers. Then there is Microsoft’s excellent dividend program. Despite the company’s low yield of about 1% (the S&P 500’s average is 1.2%), Microsoft regularly increases its payouts, having done so by 153% over the past decade.<\/p>\n Microsoft is unlikely to cut its dividend given the amount of free cash flow it generates — $77.4 billion over the trailing-12-month period — and its highly conservative cash payout ratio of 33.6%. With all that said, how should retiree investors approach Microsoft stock? Despite its strengths, the tech giant can be volatile, as evidenced by its significant decline in market value over the past six months. However, given its robust underlying business and growth prospects driven by cloud computing and AI, it should eventually bounce back while maintaining its dividend program intact. Retirees looking for some exposure to the AI industry may allocate a (very) small portion of their portfolios to Microsoft.<\/p>\n Before you buy stock in Microsoft, consider this:<\/p>\n The Motley Fool Stock Advisor analyst team just identified what they believe are the\u00a010 best stocks<\/a> for investors to buy now\u2026 and Microsoft wasn\u2019t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.<\/p>\n Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation,\u00a0you\u2019d have $550,348!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you\u2019d have $1,127,467!*<\/p>\n Now, it\u2019s worth noting\u00a0Stock Advisor\u2019s total average return is 959% \u2014 a market-crushing outperformance compared to 191% for the S&P 500.\u00a0Don’t miss the latest top 10 list, available with\u00a0Stock Advisor, and join an investing community built by individual investors for individual investors.<\/p>\n See the 10 stocks \u00bb<\/a><\/p>\n *Stock Advisor returns as of April 11, 2026. <\/p>\n Prosper Junior Bakiny<\/a> has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft. The Motley Fool has a disclosure policy<\/a>.<\/p>\n