Microsoft Announce $60 Billion New Share Buyback Programme

The US-based tech giant Microsoft Corp. on Monday announced that its board of directors have approved a new share repurchase programme authorising up to $60 billion in share repurchases and this programme, which has no expiration date, may be terminated at any time.

The company also declared a quarterly dividend of $0.83 per share, reflecting a 10% increase over the previous quarter’s dividend. The dividend is payable 12 December 2024, to shareholders of record on 21 November 2024.

The share repurchase programme is expected to bring a sizable number of shares back into its own hands. Currently, each share price is around $431 and the repurchase programme up to $60 billion, representing a meagre 2% of its shares, is still a small fraction as Microsoft’s current market value is estimated to be around $3.21 trillion.

While there was no reason was given by the company on its decision to repurchase the shares, it is believed that Microsoft, which has been focussing on Artificial Intelligence (AI) in a big way in the recent past, will utilise the funds raised to make further investments in the sector.

Microsoft, which has already invested more than $10 billion on AI in ChatGPT maker OpenAI, said in July this year that the company will spend more on AI development throughout this fiscal year. The company’s capital expenditure has increased by 77.6% during the second quarter (April-June) this year, mostly on AI-related infrastructure.

Annual Shareholders Meeting

Microsoft has also announced that the Annual Shareholders Meeting will be held on 10 December 2024. Shareholders at the close of business on 30 September 2024, the record date, will be entitled to vote their shares.

This year’s annual shareholders meeting will be held virtually and hosted by Satya Nadella, chairman and chief executive officer; Amy Hood, executive vice president and chief financial officer; Brad Smith, vice chair and president; and Sandra E. Peterson, Microsoft lead independent director.

According to media reports, while the Azure cloud business reported slower growth in the recent quarter, Microsoft expects acceleration in the second half of fiscal 2025.

The company faces pressure from investors to demonstrate returns on its substantial AI investments, a trend observed across major tech firms, including Alphabet’s Google. Microsoft distinguishes itself by detailing AI contributions in its quarterly earnings reports, unlike many firms still awaiting significant gains from AI, Bizz Buzz news portal said in a report.

Last month, Microsoft restructured its reporting, incorporating some search and news advertising revenue into its Azure cloud division.

In comparison, Apple announced a record $110 billion share buyback program in May following strong quarterly results. Microsoft’s shares saw a slight increase in after-hours trading and have risen approximately 15% this year, the report said.