Microsoft in $60b share buyback programme

• New buyback initiative will replace a previously announced buyback programme of the same amount from 2021 and notably carries no expiration date.

Microsoft Corporation announced a significant financial initiative, unveiling a substantial $60 billion stock buyback programme.

The move marks a pivotal moment for the tech giant, equaling its largest-ever repurchase authorisation. Additionally, Microsoft raised its quarterly dividend by 10 per cent, increasing the payout from 75 cents to 83 cents per share, effective for shareholders as of November 21.

The new buyback initiative will replace a previously announced buyback programme of the same amount from 2021 and notably carries no expiration date.

The timing of these announcements reflects Microsoft’s robust performance and strategic positioning in the ever-evolving technology landscape, particularly as the company capitalises on the growing market enthusiasm for artificial intelligence (AI).

Stocks rise

As the world’s second-most valuable company, Microsoft has adeptly integrated AI advancements into its diverse product offerings, leveraging its partnership with OpenAI to enhance applications such as Teams, Word, and Outlook.

The recent release of a new range of AI tools further underscores its commitment to innovation and market leadership.

Investor reactions to Microsoft’s announcements were cautiously optimistic, with shares experiencing a slight uptick of less than one per cent in after-hours trading, following a closing price of $431.34 on the previous day.

Over the past year, Microsoft’s stock has surged by 31 per cent, reflecting strong market confidence in its growth trajectory.

Financially, Microsoft remains anchored by a solid liquidity position, boasting $75.5 billion in cash and equivalents as of June 30.

The company′s free cash flow for the fiscal fourth quarter reached $23.3 billion, indicating a year-over-year increase of 18 per cent.

The growth is attributed to higher capital expenditures aimed at bolstering cloud services and AI capabilities, reinforcing Microsoft’s status as a leader in the tech sector.