Microsoft announced on Monday that its board has approved a new share buyback programme of up to $60bn.
Additionally, the company declared a quarterly dividend of $0.83 per share, marking an 8-cent, or 10 per cent, increase compared to the previous quarter.
The annual shareholders meeting is scheduled for December 10.
According to reports, in July, Microsoft revealed plans to increase spending on artificial intelligence (AI) infrastructure this fiscal year, with capital expenditures rising by 77.6 per cent in the quarter ending June 30, largely driven by AI-related investments.
Although the company reported a slowdown in growth for its Azure cloud business in the most recent quarter, it expects growth to accelerate in the second half of fiscal year 2025.
Both Microsoft and other tech giants, such as Alphabet’s Google, are under pressure from investors to demonstrate returns on their significant investments in AI infrastructure.
Microsoft stands out as one of the few major companies that disclose AI contributions in their quarterly earnings reports, while many firms are yet to see substantial gains from AI investments.
In a recent move, Microsoft restructured how it reports business unit performance, shifting search and news advertising revenue under its Azure cloud-computing division.
Meanwhile, other major technology companies, such as Apple, have also announced large-scale buyback programs, with Apple unveiling a record $110 billion buyback in May following strong quarterly results.
Microsoft, the world’s second-most valuable company, has benefited in the past several years from market exuberance for artificial intelligence.
The software maker has infused its product line with AI technology from partner OpenAI and has touted the tools’ ability to augment its business applications, such as Teams, Word and Outlook. Microsoft earlier Monday released a new range of AI tools.
The shares rose less than 1% in extended trading after the buyback was announced after closing at $431.34 in regular trading on Monday. The stock has gained 31 per cent in the past year.
Microsoft had $75.5bn in cash and equivalents as of June 30, according to data compiled by Bloomberg. Free cash flow in the fiscal fourth quarter was $23.3bn, the Redmond, Washington-based company said in July, up 18 per cent year-over-year reflecting higher capital expenditures to support our cloud and AI offerings.