Microsoft launches US$60b buyback, boosts dividend
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The news: Microsoft on Monday afternoon (US time) announced a USD60 billion ($88 billion) stock buyback at the same time as it raised its quarterly dividend 10% to USD0.83 per hare.
The numbers: Market reaction to the move since the announcement has been minimal, with Microsoft's stock up 0.75% in after-hours trading to USD433.
The company is currently the second most valuable in the world, valued at USD3.206 trillion — a stone's throw from Apple, which is sitting at USD3.288.
The context: The buyback and increased dividend may be a move to calm investors who are nervous about the enormous amount of capital Microsoft has invested in artificial intelligence to date, and plans to invest in the near- to mid-term.
Microsoft spent USD19 billion on capital expenditure in the quarter ending 30 June, mostly on AI infrastructure, a 35% increase from the quarter prior.
Microsoft's considerable investments have made some skittish to see returns — its shares fell 7% after its most recent quarterly earnings showed its cloud division “only” grew by 29%, rather than the 30% Wall Street expected.
