With President Donald Trump’s tariff warnings now becoming a harsh reality, multiple sectors in the market — including vaunted and reliable tech dividend stocks — fell sharply. Such high-level actions generally don’t pan out so well, sparking anxiety among investors. At the same time, opportunistic, forward-thinking market participants may have a compelling opportunity on their hands.
Overall, companies that provide passive income outperform non-dividend securities during periods of economic uncertainty. Obviously, pure growth stocks don’t provide a reason beyond speculation for holding on. As fundamental circumstances worsen, non-dividend-paying companies are often among the first to be jettisoned. In shaky environments, they are simply too risky, offering little in the way of predictability.
Further, tech dividend stocks represent the best of both worlds. Obviously, they provide passive income, making them ideal prospects in troubled waters. Just as importantly, these enterprises also provide growth potential. While the upside may not be as robust as purely growth-focused entities, the underlying businesses often tie into burgeoning innovations such as cloud computing or artificial intelligence.
Another factor to consider is the concept of sector rotations. Tariffs may spark a protracted trade war. This time, the tension isn’t limited to adversarial nations like China but rather to key allies and economic partners such as Canada. In many ways, we’re entering unprecedented waters. As such, investors are incentivized to rotate into yield-generating assets.
Finally, because of the passive income, these “generous” innovators tend to have more resilient or robust financials — financials that can better withstand the pressures of a trade war. With that in mind, below are three tech dividend stocks to consider picking up on discount.
A leading semiconductor firm specializing in embedded control solutions, Microchip Technology (NASDAQ:MCHP) primarily provides microcontrollers, which are essentially tiny computers on a chip that power myriad applications. It also focuses on analog semiconductors and memory products used in various industries. At the moment, Microchip is one of the largest providers of microcontrollers, supporting automotive uses (mainly electric vehicles), Internet-of-Things (IoT) devices and factory automation.
Primarily, Microchip ranks among the top tech dividend stocks on discount because of its high forward yield of 3.14%. To be fair, the payout ratio is somewhat elevated at 72.26%. However, that’s a relatively small detail compared to the number of years of dividend increases, which stands at 23 years. When conditions get shaky, those interested in powerful innovations will often turn to Microchip for its reliable yield.
Other factors also make MCHP one of the top tech dividend stocks to buy. Right now, Microchip commands operating cash flow of $1.12 billion and levered free cash flow (FCF) of $1.36 billion. And although the security gained over 10% in the trailing month, over the past 52 weeks, it’s down more than 33%. That’s quite a deal for the relevance the company offers. Be sure to put this on your watch list.
A global leader in data storage solutions, Seagate Technology (NASDAQ:STX) specializes in hard disk drives (HDDs), solid-state drives (SSDs) and enterprise storage solutions. Seagate commands respect as one of the two dominant players in the HDD market. This arena is likely to enjoy ongoing relevance as it underpins data centers, cloud computing and enterprise IT infrastructure. Additionally, gaming consoles and PCs utilizes HDDs.
In addition to the explosive growth potential of cloud computing, Seagate could potentially ride the coattails of generative AI. After all, the company’s high-performance storage systems are critical for large-scale data centers, as well as AI workloads and hyperscale computing. Moreover, major cloud providers depend on Seagate’s high-capacity HDDs to store large volumes of digital information.
Fundamentally, Seagate represents one of the top tech dividend stocks to buy for its high yield of 2.88%. In contrast, the tech sector’s average yield is only 1.37%. And while the passive income is a bit less than Microchip’s, Seagate’s payout ratio is only 29.4%. That’s super-low, suggesting greater dependability.
Seagate also enjoys tremendous growth potential — something that Microchip lacks. For fiscal 2025, analysts anticipate revenue of $8.96 billion, up 36.72% from the prior year. In fiscal 2026, experts see the top line reaching $10.16 billion, up 13.44% from projected 2025 sales.
Another critical semiconductor company, Skyworks Solutions (NASDAQ:SWKS) designs and manufactures radio frequency (RF) and wireless connectivity chips. These specialized semiconductors enable various wireless communication protocols, such as 5G, Wi-Fi and Bluetooth, among others. Naturally, Skyworks represents a key player for smartphone, IoT and industrial applications.
From a practical perspective, one of the most tempting reasons to consider SWKS is its forward yield of 4.27%. That’s not just high for tech dividend stocks but rather for several other industries. Indeed, when you get into the 4%-plus range, you’re talking about defensive plays like utilities. Further, the payout ratio is quite reasonable at 66.05% and Skyworks enjoys 11 years of consecutive dividend increases.
To be fair, one main drawback is reduced growth expectations. Assuming that the most optimistic targets don’t pan out, Skyworks may incur top-line erosion relative to prior years. However, it’s also fair to point out that the company enjoys resilient financials. For example, it has a low debt-to-equity ratio of 18.64%. Additionally, it commands operating cash flow of $1.43 billion and levered FCF of over $972 million.
Lastly, SWKS stock fell 26% on a year-to-date basis, implying that most of the bad news has been baked in. Therefore, this could be an interesting name for risk-tolerant speculators.
