AI Stocks Are Crashing. Should You Buy Dividend Stocks?

On Thursday, November 5th, Nvidia lost $447 billion. In one day.

That's more than the entire Coca-Cola company is worth. Every can, every bottle, every vending machine on the planet, gone in about six and a half hours.

And Coca-Cola itself? It moved seven hundredths of a percent that day. It basically shrugged.

The whole stock market fell more than four percent. And if you own an S&P 500 fund, the safe, boring one everybody tells you to buy, you took a real hit too. We'll show you why in a minute, and you're not going to love it.

So now everybody is asking the same question. Should you dump the AI stocks and buy dividend stocks instead?

We didn't want to guess. So we gave two people $100,000 each, one bet on AI and one bet on dividends, and we let the real market do whatever it wanted to them. And then we found a third guy, who did the exact thing everybody is thinking about doing right now. He did it in 2022. It did not go the way he planned.

Meet Max and Ruth. They're made up. Their money isn't. Every price and every dividend in this video really happened.

On New Year's Eve 2025, each of them gets $100,000.

Max goes where the action is. He puts all of it into QQQ, the Nasdaq 100 fund. Apple, Nvidia, Microsoft, Amazon, Meta. If it has a chip or a chatbot, Max owns it.

Ruth puts hers into SCHD, a fund of 100 companies that have paid dividends for at least ten years in a row. Oil companies. Coca-Cola. Pepsi. Procter and Gamble, the people who make your toothpaste. Her biggest tech company is Texas Instruments. Yes, the calculator people. Ruth owns zero Nvidia.

They both follow two rules. They never sell. And when a dividend comes in, it lands in their account as cash, and they leave it there.

Max thinks Ruth's portfolio is what your grandparents would buy. And for most of this year, the scoreboard agreed with him.

Max gets his first scare in March. By March 30th, his $100,000 is down to $90,879. Ruth is sitting at $111,119. Max calls it a blip.

And he's right. The AI trade wakes up. By the end of May, Max is past $120,000, and he's ahead of Ruth again.

Meanwhile Ruth gets a small payment every three months. In March, $936.93. In June, $922.35. In September, $973.39.

Max gets dividends too, technically. All year, they add up to $374. Max doesn't bring those up.

Then comes October 6th. Max's $100,000 is worth $123,661. Ruth is at $119,759. Every headline is about how much money is pouring into AI data centers, and if you're Max, you feel like a genius.

Hold on to that number. $123,661.

Here's what happened next.

At the end of October, Meta said it might need to raise up to $100 billion in new stock to pay for all the AI it's building. Investors did the math. If even Meta needs that much money, how much is all of this costing, and when does it ever pay back?

Then came the midterms. Candidates in both parties had been campaigning against giant AI data centers. Two days after the election, on November 5th, the market made up its mind.

Max's phone buzzes. Your portfolio is down $7,309 today.

Ruth lost $2,880 that day. And if you'd put your $100,000 into Coca-Cola, you lost about a hundred bucks. A nice lunch.

By Friday, Max's $123,661 is $106,803. Almost $17,000, gone in five weeks. He's technically still up for the year. It does not feel like it.

And Ruth? Her shares are worth $128,217, plus $2,833 in dividends sitting in her account. She didn't predict anything. She just owned things people keep buying when they're scared. Oil, toothpaste, soda, medicine. In this whole wild year, her account never once dropped below the $100,000 she started with.

Scoreboard. Ruth is ahead by almost $24,000.

Now you might be thinking, I'm not Max. I don't own a tech fund. I own the S&P 500. Five hundred companies. I'm diversified. I'm fine.

Let's open it up.

The single biggest thing inside an S&P 500 fund right now is Nvidia, at 8.4 percent. Then Apple. Microsoft. Amazon. Alphabet, Broadcom, Meta. The top ten holdings are all big tech, and together they're 39 cents of every dollar you put in. That's why your boring index fund fell 4.4 percent on November 5th. It's a lot closer to Max than you thought.

And here's the one that surprised us. Dividend funds aren't automatically AI free either. VYM, one of the most popular dividend funds there is, has Broadcom as its biggest holding. Broadcom makes AI chips, and it's down 39 percent from its June high.

Oh, and the AI giants pay dividends now too. This year, Nvidia raised its dividend from one cent a share to 25 cents. Twenty-five times bigger. The headlines loved it.

So if Max had put his $100,000 straight into Nvidia, what would that pay him? $134 a quarter. Ruth's September payment was $973. Turns out twenty-five times a tiny number is still a pretty small number.

So that settles it, right? Sell the AI, buy the dividends?

Not so fast. Because this exact movie already played once.

It's New Year's Eve, 2021. Another $100,000 for Max, another $100,000 for Ruth. Same funds. This time, every dividend goes straight back in.

2022 was brutal for tech. Interest rates shot up, and the Nasdaq got crushed. At the bottom, Max was down 33 percent. Ruth was down 18, and her fund paid her $3,170 in dividends that year. Max's paid him $537.

Ruth won 2022 by a mile. And that's when Max's cousin Kevin walks into the story.

Kevin also had $100,000 in QQQ. At the end of 2022, after a full year of watching it melt, Kevin did the sensible thing. He sold everything and moved it all into SCHD. Safe. Boring. Dividends. Done.

Then 2023 happened. ChatGPT had come out a few weeks earlier, the AI boom took off, and tech came roaring back. By the end of 2023, Max was back above where he started.

Here's where all three of them are today, with every dividend reinvested. Ruth has $157,482. Max, who just sat there through the whole crash, has $178,601. And Kevin, who did the sensible thing, has $109,757.

The crash belonged to Ruth. The comeback belonged to Max. And Kevin somehow got the worst of both.

So should you buy dividend stocks right now?

If you want your money to pay you, so you can spend it without selling anything, Ruth's way works. Her payments kept showing up all through 2022, and all through this year. She never had to sell a share on a bad day.

If you won't need the money for years, and you can watch $17,000 vanish in five weeks without touching the sell button, Max's road has paid more over the last five years.

What doesn't work is being Kevin. Switching after a crash, because of the crash, is how you sell low and miss the bounce. Nobody knows if this one bounces like 2022 did. We certainly don't. But that switch is a decision for a calm Tuesday, not for November 5th.

And whatever you own, open it up. If you have an S&P 500 fund, you own a lot more AI than you think. You can look inside any fund, and compare any two, for free at smarterdividends.com. The link is in the description.

On November 17th, Nvidia reports earnings, and everyone will have an opinion. Ruth won't be watching. Her next payment comes in December.