Browse past tech stock questions and answers in the Ask Matt archive . It's an important measure of profitability carefully watched by investors. Dividends, on the other hand, are cash payments companies voluntarily pay out to investors. This cash is taken out of the company's profit. Most tech stocks don't pay dividends.
Tech companies prefer to reinvest their earnings in funding their growth.
Tech companies are often rapidly expanding, building new plants and developing products - all of which require money. If they pay this money out to investors, they will have less left to grow the company. After all, you're investing in that company so that it will put your capital to work. If you wanted steady cash payments, you would have opened a savings account.