Tech stocks typically don’t get much attention from dividend investors, as many of these stocks pay very little. Microsoft (NASDAQ: MSFT) is a notable exception. The tech giant paid its first dividend in 2003 and has increased its payout every year since 2004, making it one of the more underappreciated dividend stocks.
If your goal is earning $1,000 in annual dividends, you could reach it by buying Microsoft stock, though it would require a sizable investment.
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »
Microsoft pays a quarterly dividend of $0.91 per share, which adds up to $3.64 per year for each share you hold. Based on that amount, you’d need 275 shares for $1,000 in yearly dividend income. Microsoft stock is down quite a bit lately, but that many shares would still cost you about $105,000 as of March 20, 2026, when it closed at $382.
A six-figure investment in a single company is too steep for most investors, but a more reasonable amount could make sense to buy the dip on Microsoft. There are legitimate reasons behind Microsoft’s decline — it’s spending heavily on artificial intelligence, Azure growth hasn’t met expectations, and software stocks as a whole have been hit hard due to worries about AI — but it’s not all bad news.
Revenue grew 17% year over year to $81.3 billion in the second quarter of its 2026 fiscal year, which ended Dec. 31, 2025. Microsoft Cloud, in particular, was a highlight with $51.5 billion in revenue, a 26% year-over-year increase.
The market has probably overreacted to Microsoft’s issues, making this a good entry point to invest. In addition to being one of the most proven tech stocks, investing in Microsoft also generates passive income that is likely to increase each year, given the company’s track record of dividend growth.
Before you buy stock in Microsoft, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Microsoft wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $503,592!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,076,767!*
