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Analyst Recommends This Top Dividend Growth Stock for ‘Ability to Sleep at Night’

David Bahnsen, The Bahnsen Group CIO, recently talked on CNBC about the importance of dividend growth stocks and said the “ability” to sleep at night that these stocks give to investors comes from their strong track record. He believes dividend growth “immunizes” investors from volatility.

“I think you get some of that ability to sleep at night if you’re not so reliant on expensive things getting more expensive. That’s really the key, is you already have the things you’re talking about — top-down macro uncertainty, tariff policy, geopolitics, things like that. But when you combine that with high PEs that you just need to get higher in order to see your investments do well, I think that becomes problematic. Dividend growth immunizes investors from some of that.”

Bahnsen then talked about why he loves International Business Machines (NYSE:IBM) as a dividend growth play:

Well I love talking about IBM Common Stock (NYSE:IBM) and that’s one of the names that’s done really well this year. There’s other names that haven’t done as well, which I like even more because they’re cheaper. IBM’s up 20%, but here’s the thing. It’s trading at 17 or 18 times what 2025 free cash flow will be. You’re talking about that up against other names trading at 40, 50, 60 times what their free cash flow may be. IBM Common Stock (NYSE:IBM) has grown the dividend, Kelly, every single year since 1994. Think about how much has gone on in the world over that 30 plus years. IBM’s grown the dividend every year in that period. Impressive. So we just think it’s a great name that’s tethered to both old tech and new tech.

Image by Steve Buissinne from Pixabay

IBM is indeed making a comeback. As of the end of Q4, IBM’s AI products and services surpassed $5 billion in total bookings, with $2 billion added just since last quarter. Last year, IBM updated its Granite family of AI models for enterprise use, making them about 90% more cost-efficient than large models. RedHat is also key in IBM’s open-source GenAI strategy. Management highlighted that RHEL AI and OpenShift AI platforms are gaining traction, along with IBM’s watsonx AI solutions. The company expects its software business to grow by at least 10% in 2025, up from 8.3% growth in 2024.

While we acknowledge the potential of IBM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.

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When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

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  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

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