The technology giant raises its dividend by 10%, and boosts spending on AI and cloud growth
Athira Sethu
Kochi, 17 September
Microsoft has announced that its board has approved a new share buyback programme worth up to $60 billion.
A share buyback allows a company to repurchase its own stock from the market, which can boost the value of the remaining shares and return money to shareholders.
Along with this, Microsoft also announced a 10% increase in its quarterly dividend, raising it to $0.83 per share, an 8-cent rise from the previous quarter. These moves are aimed at rewarding investors while continuing the company’s focus on long-term growth.
The announcement comes as Microsoft continues to make large investments in artificial intelligence (AI). In July, the company revealed its plan to significantly increase spending on AI infrastructure over the current fiscal year. This was evident in the 77.6% rise in capital expenditures for the quarter ending June 30, with much of this additional spending going towards AI-related projects. Microsoft sees AI as a key driver of future innovation, and these investments reflect its commitment to leading in this rapidly growing field.
Despite its heavy focus on AI, Microsoft experienced slower growth in its Azure cloud business in the most recent quarter. However, the company is optimistic that growth will accelerate in the second half of fiscal 2025. To better align its reporting with its evolving business model, Microsoft has restructured its financial reporting. Revenue from search and news advertising has been moved under the Azure cloud-computing division, highlighting the growing importance of cloud services across multiple areas of its business.
Microsoft, like other major tech companies such as Alphabet (Google’s parent company), is under pressure from investors to show returns on its large investments in AI. While many companies are still in the early stages of benefiting from AI, Microsoft stands out as one of the few that actively reports AI contributions in its quarterly earnings. This transparency sets Microsoft apart in the tech industry, where AI remains a developing area with long-term potential.
Microsoft’s annual shareholders’ meeting is scheduled for December 10, 2024, where the company’s AI strategy and future financial plans are expected to be major topics of discussion. This share buyback programme comes just months after Apple announced its own record-breaking $110 billion buyback plan in May, following strong quarterly earnings. Microsoft’s share price closed 0.17% up at $431.34 in Nasdaq on Monday.
