What do you think of when you hear the phrase "AI stock"? Different people will no doubt have different responses. However, I suspect that few, if any, would include anything related to dividends.

Sure, some AI stocks offer dividends. But for the most part, those dividends aren't anything to get excited about. There is one notable exception, though. Here's the only AI stock on the market with a dividend yield of 5%.

Big Blue, big dividend

I'll cut right to the chase: The AI stock with that juicy dividend is IBM (IBM 1.06%). Technically, the technology giant's dividend yield is a little above 5%.

IBM, known as Big Blue for years, perhaps because of the color of its corporate logo, has been a longtime favorite of income investors. The company has paid a dividend every quarter since 1916.

What's more, IBM has also steadily grown its dividend. Its latest dividend hike declared in April 2023 marked the company's 28th consecutive year of dividend increases.

Can IBM keep that impressive streak going? I think so. The company paid a little under $6 billion in dividends last year. It generated free cash flow of $9.2 billion, well above the level needed to fund the dividend program. 

IBM's AI focus

While IBM has been known for its dividend for years, it's also been a pioneer in AI for a long time as well. The company achieved several early AI milestones.

For example, in 1997, IBM's Deep Blue system defeated Garry Kasparov in a chess match and subsequent rematch. Kasparov was the world chess champion at the time. In 2011, IBM Watson made headlines by beating Jeopardy! champions Ken Jennings and Brad Rutter. 

IBM continues to invest heavily in AI development today. The company recently announced several new tools. Watsonx.ai, a new platform for building AI models, stood at the forefront. IBM also highlighted its new graphics process unit (GPU) specifically designed for AI. 

Offerings such as these are attracting customers. For example, vaccine developer Moderna is teaming up with IBM to use quantum computing and AI to advance messenger RNA research. Enterprise software provider SAP is integrating IBM Watson AI into its solutions for customers. 

Is the stock a buy?

Unlike most AI stocks, IBM hasn't skyrocketed so far this year. Instead, its shares have tumbled. Wall Street doesn't expect IBM to deliver impressive gains anytime soon, either.

Growth investors can definitely find attractive alternatives to buy right now. However, that doesn't mean that IBM isn't a stock for other investors to consider.

Many income investors will like IBM's dividend. Even if the stock doesn't generate jaw-dropping returns, the dividend is reliable.

Value investors could be interested in IBM as well. Its shares currently trade at around 13.7 times expected earnings. That's much lower than the S&P 500's forward earnings multiple of 19. IBM is even more of a bargain compared to the information technology sector's forward earnings multiple of 27. 

No, IBM probably won't be the biggest winner in AI over the next decade and beyond. However, it could at least be among the winners. For income and value investors, there's arguably no better way to buy a ticket to the AI revolution.