Investors looking for stocks that can outperform want to turn their attention to dividend payers, regardless of whether they’re interested in building a passive income stream. Companies that pay dividends tend to outperform those that don’t, and the differences are dramatic.

From 1973 through 2024, the average dividend-paying stock in the benchmark S&P 500 index delivered a 9.2% annual return. Non-dividend-paying stocks in the same index produced a measly 4.3% annualized return over the same time frame, according to Hartford Funds and Ned Davis Research.

The past 12 months have been relatively rough periods for Novo Nordisk (NVO 2.06%) and Realty Income (O 0.76%). Shares of the real estate investment trust (REIT) are down by 10% from the peak they set last fall. Novo Nordisk has fared much worse. Its stock has been beaten down more than 60% from a peak it set last year. Here’s why most investors would do well to buy both while they’re down and hold them for at least a decade.

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1. Novo Nordisk

Novo Nordisk’s lead drug, semaglutide, is the injectable glucagon-like peptide-1 (GLP-1) receptor agonist marketed as Ozempic for diabetes and as Wegovy for weight management. The Denmark-headquartered company also markets an oral version of semaglutide for diabetes patients under the brand name Rybelsus.

The Food and Drug Administration is reviewing an application that could make an oral version of semaglutide for weight management available before the end of 2025. The stock has been under pressure because semaglutide has been losing market share to a younger, more effective treatment called tirzepatide from Eli Lilly.

Lilly’s tirzepatide is another GLP-1 drug that acts on glucose-dependent insulinotropic polypeptide receptors, too. Its dual mode of action makes it better at weight reduction, but it’s also harder to tolerate. Obesity patients can still achieve similar weight reduction targets with more easily tolerated semaglutide. It just takes longer.

Eli Lilly’s tirzepatide will probably outsell semaglutide, but it isn’t going to replace Novo Nordisk’s lead drug completely. Despite the competition, Novo Nordisk’s business is growing fast. Management expects operating profits to rise by 10% to 16% in 2025.

American investors will find Novo Nordisk’s dividend program annoying but worth the hassle. Instead of equal quarterly payments, it declares one large annual payment and a lower interim payment in its native currency.

If this year’s payments fall in line with last year’s, investors who buy at recent prices would receive a 3.2% yield. A much higher payout seems likely. Dividend payments made in 2024 were 120% higher than the payments it distributed in 2020. Management expects operating profits to grow by double digits this year. This should translate to plenty of cash that it can use for a large payout bump.

2. Realty Income

If you’re interested in more frequent payments that rise steadily, consider Realty Income stock. This net lease REIT has been delivering monthly payments since it acquired its first property in 1970.

Realty Income has raised its dividend payout 131 times since it went public in 1994. Its dividend isn’t growing as quickly as Novo Nordisk’s, but it has risen by 3.9% annually over the past decade. That’s more than enough to outrun the typical pace of inflation.

Rising Treasury yields make reliable dividend stocks less attractive. As a result, Realty Income’s stock has been moving in the opposite direction from its dividend payout. At recent prices, the stock offers an unusually high 5.6% yield.

Realty Income should have no problem meeting its dividend obligation. In 2025, it expects adjusted funds from operations, a proxy for earnings used to evaluate REITs, to reach a range between $4.24 and $4.28 per share. That’s heaps more than it needs to meet a dividend obligation currently set at $3.228 per share.

Realty Income develops properties, but sale-leaseback deals are a large part of its business. With a highly favorable A3 credit rating from Moody’s, this REIT can generate profits while offering new tenants terms that its less-established competitors can’t beat. This stock isn’t going to be the market’s greatest performer in any given year. Over time, though, steady gains could allow it to outperform the broad market. Adding some shares to a diverse portfolio now looks like a smart move for most investors.

Despite a recent dip in response to unfavorable economic data, the stock market’s bull run seems unstoppable. From April 4 through Aug. 8, the S&P 500 index shot up a whopping 25.9%.

For dividend-seeking investors, a buoyant stock market can be a little annoying. Stock prices rising faster than profits means most dividend payers offer unattractive yields. The average yield from dividend payers in the benchmark S&P 500 index is an unattractive 1.2% at recent prices.

Most dividend yields aren’t particularly desirable right now, but there are still some underappreciated gems hiding in plain sight. Novo Nordisk (NVO 4.70%) and Brookfield Infrastructure (BIP -0.46%) (BIPC 0.01%) offer an average yield of 3.9% at recent prices. Plus, they could raise their payouts at a mid-single-digit percentage, or better, every year from now until you want to retire.

You don’t have to be wealthy to put your money to work with these stocks. At recent prices, $100 is enough to buy a share of both. Here’s why that looks like a great idea for folks who would like to grow their passive income streams.

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Novo Nordisk

From the end of 2023 through Aug. 7, shares of Novo Nordisk lost more than half their value. Earnings reported by the Denmark-headquartered company that markets Ozempic and Wegovy have performed much better than the stock.

If we ignore currency exchange rates, U.S. investors who buy the stock at recent prices would receive a 3.44% yield if Novo Nordisk holds the payout flat. Holding dividend payments steady isn’t in this company’s nature. From 2020 through 2024, it raised annualized dividend payments by 120% in its native currency.

Shares of this drugmaker have been under intense pressure since management lowered its sales outlook for 2025. On Aug. 6, the company told investors to expect revenue to rise between 8% and 14% this year. That’s much slower than the 13% to 21% range management provided in May.

On the bottom line, management lowered its operating earnings growth outlook to a range of between 10% and 16% this year. This is a slower rate of growth than we had been expecting, but it’s still pretty good for an established pharmaceutical business.

Shares of Novo Nordisk have been beaten down to just 14.1 times trailing earnings. This valuation implies growth at a low single-digit percentage over the long run. I’d argue that profit growth of around 10% annually seems far more likely.

During its initial launch, Novo Nordisk failed to produce enough Wegovy to meet demand, which allowed independent compounding pharmacies to fill in the gap. The Food and Drug Administration declared an end to the Wegovy shortage in February. Compounding pharmacies that have been fighting the decision in U.S. courts without success are a headwind that seems likely to subside.

Brookfield Infrastructure

Even if you haven’t heard of Brookfield Infrastructure, there’s a good chance your employer relies on at least one of its assets. This subsidiary of Brookfield Asset Management owns and operates critical infrastructure networks that facilitate the flow of freight, passengers, data, water, and energy.

Shares of Brookfield Infrastructure have fallen by about 15% over the past three years, but its dividend payout has risen by 18.5% over the same time frame. At recent prices, the stock offers an unusually large 4.3% dividend yield.

Investing in pipelines, fiber optic cables, railways, data centers, toll roads, and telecom towers receives significantly less attention than big tech’s investments in artificial intelligence (AI). I’d argue that this is one of the safest AI stocks you can buy now. Nobody knows which large language models will become the most popular over the long run, but we can be sure they will require heaps of energy and data transmission. Brookfield Infrastructure’s portfolio includes assets that provide both.

During the second quarter, Brookfield Infrastructure reported funds from operations (FFO), a proxy for earnings used to evaluate asset-heavy businesses, that rose 5% year over year to $0.81 per share. This is heaps more than it needs to meet a quarterly dividend payout currently set at $0.43 per share and raise it much further. Adding some shares to a diversified portfolio looks like a nearly surefire way to generate heaps of dividend income over the long run.

Between earnings season — the six-week period every quarter where a majority of the most-influential businesses report their operating results — economic data releases, and updates from the Trump administration, keeping up on market-moving news events can be challenging for investors. In fact, it’s easy for something of importance to slip through the cracks.

One key data release that investors might have overlooked is the May 15 deadline for institutional investors with at least $100 million in assets under management to file Form 13F with the Securities and Exchange Commission. A 13F is required to be filed no later than 45 calendar days following the end to a quarter, and it provides investors with a concise snapshot of which stocks Wall Street’s top-tier asset managers have been buying and selling.

Though 13Fs have their flaws — e.g., they can offer a stale snapshot for very active hedge funds — they’re invaluable in helping investors piece together which stocks and trends have the undivided attention of successful fund managers.

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While investors tend to wait on the edge of their seat to see what billionaire Warren Buffett has been up to, he’s far from the only billionaire known to make waves in the stock market. Third Point’s Dan Loeb is another billionaire asset manager known for spotting good deals.

During the March-ended quarter, Third Point’s billionaire chief made two curious trades in the artificial intelligence (AI) arena. He sent his fund’s entire stake in Meta Platforms (META -0.98%) packing, and loaded up on shares of an undisputed AI leader whose addressable market can potentially grow 25-fold over a 10-year stretch.

Billionaire Dan Loeb’s Third Point logs out of Meta

Based on Third Point’s 13F, Loeb completely exited nine positions during the first quarter, none of which is more of an eyebrow-raiser than social media titan Meta Platforms. Loeb green-lit the sale of all 665,000 shares that were held at the end of 2024.

It’s quite possible that this sale represented nothing more than a profit-taking opportunity for Third Point’s billionaire chief. On average, Loeb’s fund holds its positions for a little over 13 months, and Third Point’s Meta stake had been initiated during the third quarter of 2023. With Meta stock more than doubling during this period, Loeb had plenty of reason to cash in his chips.

The question is: Was something more nefarious behind this selling activity than just benign profit-taking?

One concern is the potential for the U.S. economy to fall into a recession. Though the New York Federal Reserve’s recession probability tool only shows 28.7% chance of a recession occurring through June 2026, it has an uncanny track record of successfully forecasting economic downturns when this probability climbs above 32%, which it did in 2023 and 2024. The last time the New York Fed’s recession probability indicator provided a false positive was October 1966.

While most stocks tend to be adversely impacted by recessions, Meta is particularly vulnerable since almost 98% of its net sales derive from advertising. Businesses aren’t shy about paring their marketing budgets at the first signs of trouble.

It’s also possible Dan Loeb was skeptical of Meta’s future stock performance given CEO Mark Zuckerberg’s plans to spend aggressively on AI-data center infrastructure. Despite Zuckerberg’s phenomenal track record of developing new products and monetizing them only when the time is right, he’s been consistently upping his company’s projected capital expenditures (capex). Meta’s capex forecast for 2025 slots in between $64 billion and $72 billion, which is up $5.5 billion at the midpoint from the company’s prior guidance.

Considering how pricey the stock market is as a whole, Wall Street and investors have little tolerance for mistakes. Meta Platforms spending billions on AI infrastructure above its prior forecast leaves the door open for disappointment.

While I don’t fault Dan Loeb for locking in his profits, I ultimately believe he’ll regret exiting this position when looking back years from now.

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Third Point’s billionaire investor scooped up shares of a hypergrowth stock

Excluding options, Third Point’s 13F from the March-ended quarter shows billionaire Dan Loeb opened 10 new positions, none of which offers more intrigue than the face of the AI revolution, Nvidia (NVDA -2.42%).

During the first quarter, Loeb scooped up 1.45 million shares of Nvidia, which marks the first time his fund has held shares of this AI leader since the second quarter of 2023.

To state the obvious, the global potential for artificial intelligence as a technology is otherworldly. The ability for software and systems empowered with AI to make split-second decisions without human oversight is a game-changer for most industries around the world. Based on estimates from UN Trade and Development, the global AI market is projected to skyrocket from a reported $189 billion in 2023 to $4.8 trillion come 2033. That’s a 25X increase in a decade, for those of you keeping score at home.

Nvidia becoming Wall Street’s largest publicly traded company is a reflection of just how dominant its Hopper and Blackwell graphics processing units (GPUs) have been in AI-accelerated data centers. With demand for AI-GPUs significantly outweighing their supply, Nvidia has been able to not only sell more GPUs on a year-over-year basis, but also charge a 100%-plus premium to its direct external rivals. Not surprisingly, Nvidia’s gross margin soared as the AI revolution took shape.

Third Point’s billionaire investor might also be excited about Nvidia’s innovation timeline. CEO Jensen Huang expects to bring a new advanced AI chip to market annually. If all goes according to plan, Blackwell Ultra (2025), Vera Rubin (2026), and Vera Rubin Ultra (2027) will follow in the footsteps of Hopper and Blackwell. The key point here is that Nvidia’s compute advantages appear untouchable.

The other factor that’s kept Nvidia humming along is its premier CUDA software platform. This is what developers use to maximize the compute potential of their Nvidia GPUs, as well as to build and train large language models. CUDA is quietly doing a phenomenal job of keeping Nvidia’s clients loyal to its ecosystem of products and services.

But what, arguably, makes this buy intriguing is its timing. For more than three decades, every game-changing innovation has worked its way through an early stage bubble-bursting event. Though artificial intelligence shows plenty of promise, most businesses haven’t come anywhere close to optimizing their AI solutions as of yet. With signs pointing to AI being the next in a long line of bubbles, Nvidia stock could eventually crumble.

Loeb’s buy is also interesting in the sense that it comes as competition in the AI space is exploding. While most investors are paying close attention to direct external competition, the biggest threat to Nvidia likely comes from within. Many of its largest customers by net sales are internally developing AI-GPUs for their data centers. These chips, while inferior on a compute basis to Nvidia’s hardware, are notably cheaper and more readily accessible. They can minimize AI-GPU scarcity, reduce Nvidia’s pricing power and margins, and narrow its future opportunities in AI-accelerated data centers.

It wouldn’t be a surprise if this turned out to be nothing more than a quick trade for Third Point’s chief.

The right stocks can turbocharge your stock portfolio and set you up for a comfortable retirement. However, there are nuances to investing in growing companies.

Sure, a home run stock can make you a millionaire on its own. However, if it were easy, there would be many more millionaires. The hit rate is low, so investors are usually better off looking for proven winners that still have plenty of life left in them.

The world’s largest technology companies are driving ongoing growth trends, including e-commerce, digital advertising, and cloud computing. These same companies could also benefit from upcoming opportunities in artificial intelligence (AI).

Investing $100,000 into each of these “Magnificent Seven” stocks as part of a diversified portfolio could yield a million dollars a decade from now. Here are their names, and why they could make you serious money well into the future.

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1. Amazon

E-commerce is Amazon‘s (AMZN 1.75%) core business, and the carrot that draws consumers into its Prime membership and ecosystem. However, Amazon is just as much a technology company as any. It operates the world’s leading cloud platform, Amazon Web Services, which holds an estimated 30% share of the global cloud infrastructure market. AWS is Amazon’s cash cow, contributing over half of the company’s total operating income despite representing just a fraction of its total revenue.

That’s especially important, given that AI is arguably the most prominent growth trend of the upcoming decade. AI, like most modern software, primarily runs on the cloud. AI applications are already driving significant growth for cloud capacity, prompting Amazon and other cloud companies to invest billions of dollars in building data centers to handle the load.

Amazon’s valuation, a PEG ratio of 2, is reasonable for its estimated 17% long-term earnings growth. In other words, the stock’s investment returns should reflect that growth over time. If so, cloud tailwinds from AI should boost Amazon’s most profitable business and could more than double earnings and the stock over the next decade.

2. Alphabet (Google)

Most investors know Alphabet (GOOGL 1.62%) (GOOG 1.77%) for Google Search, but it’s a diversified tech giant. It owns YouTube, Android smartphone software, and Google Chrome, develops AI software and quantum computers, and continues to expand Waymo, a ride-hailing service using self-driving vehicles.

Its massive size and broad reach make it highly likely that Alphabet will compete in AI and the opportunities it creates over the coming decade. Wall Street anticipates Alphabet growing its earnings by an average of 15% annually over the long term, despite some fears that AI chatbots could disrupt Google Search, Alphabet’s core business.

Investors shouldn’t dismiss this risk, but fear has priced the stock at a compelling PEG ratio of 1.3, assuming the company meets Wall Street’s growth estimates. If it does, investors could eventually see returns exceed Alphabet’s growth if sentiment rebounds and drives the valuation higher. Alphabet’s anticipated double-digit growth and depressed valuation make it a candidate for substantial returns over the next decade.

3. Meta Platforms

Last but not least is Meta Platforms (META -0.40%), the parent company of social media apps such as Facebook, Instagram, WhatsApp, and Threads. The company is immensely profitable, generating $50 billion in free cash flow over the past four quarters from ads shown to the 3.43 billion people who use Meta’s social apps each day.

Meta Platforms still has firm long-term leadership; CEO and co-founder Mark Zuckerberg is still only 41 years old. He has been pushing the company toward AI for several years, using AI technology to optimize its core advertising business, and launching an open-sourced AI model with over a billion downloads, and is working to establish Meta Platforms as a key player in next-generation consumer electronics.

Meta Platforms has rallied and is up significantly over the past few years. Yet the stock’s PEG ratio (1.5) remains attractive for prospective investors, and Meta’s estimated long-term earnings growth rate of 18% suggests there is enough upside for the stock to double or more over the coming decade. Meta Platforms must still monetize more of its AI projects, but if successful, investors will be glad they have this company in their portfolio over the next decade.

Bitcoin’s cryptographic resilience is facing renewed questions after a Google researcher suggested that quantum computers may be capable of breaking its encryption far sooner than expected.

Craig Gidney, a leading quantum computing researcher at Google, published new findings indicating that the hardware requirements to break 2048-bit RSA encryption, a key mathematical element similar to that of Bitcoin, have dropped significantly.

Gidney pointed out that his earlier estimates placed the threshold at 20 million noisy qubits, but the new projection requires fewer than one million.

The reduced computational burden marks a significant leap in quantum capability, though it might take several days instead of a few hours.

The Google researcher attributes the advancement to more refined quantum algorithms and enhanced error correction techniques that reduce the number of physical qubits needed by encoding logical qubits more efficiently.

Bitcoin’s quantum computing frailties

The revelations arrive as concerns grow over the pace of quantum computing development. Last year, Google introduced its Willow chip, a next-generation quantum processor that many believe brought real-world threats to digital security closer than previously assumed.

In response, major financial institutions are updating their disclosures. For example, BlackRock recently flagged quantum computing as a material risk for its Bitcoin ETF product, IBIT.

According to the firm:

“If quantum computing technology is able to advance and significantly increase its capacity relative to the capacity of today’s leading quantum computers, it could potentially undermine the viability of many of the cryptographic algorithms used across the world’s information technology infrastructure, including the cryptographic algorithms used for digital assets like Bitcoin.”

This shift reflects growing awareness that technological breakthroughs could challenge Bitcoin’s foundational encryption earlier than anticipated.

Despite the concern, some experts believe the crypto sector still has time to adapt to the potential risks.

Today’s logical-qubit demos top out at dozens (e.g., Quantinuum’s 12 logical qubits). Gidney’s 1,000,000-qubit figure is about physical (noisy) qubits, not logical. We’re three orders of magnitude away in sheer qubit count, and need major error-rate breakthroughs.

Even the physical-qubit goal is likely 8–12 years out, and a true million-logical-qubit machine is decades away.

Meanwhile, Bitcoin analyst Fred Krueger believes the emergence of a “quantum-resistant” version of the top crypto is inevitable.

He anticipates a network split between a newly fortified Bitcoin and a legacy version, similar to how Ethereum split into ETH and Ethereum Classic.

He stated:

“Ulimately there will be a fork. ‘Quantum Resistant Bitcoin (QRB)’ and ‘Bitcoin Classic.’ The big money will recognize and push QRB. Some will fight it. Bitcoin Classic (BTC) will become the new Ethereum Classic.”

Still, if Bitcoin becomes vulnerable in eight years, the network will not have long to adopt a quantum-resistant upgrade.

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