News built for finance pros
CFO Brew helps finance pros navigate their roles with insights into risk management, compliance, and strategy through our newsletter, virtual events, and digital guides.
Microsoft sees you, investors, and it appreciates you.
The world’s sometimes-largest company knows that you’ve stuck by its side as it spends tens of billions on AI and as revenue growth slowed for the cloud computing services that the company hopes will be boosted by said investments.
So, as a little thank you for having its back (and to tide you over until greater profits flow), the company will buy back up to $60 billion in shares and is boosting its dividend by about 10% (from 75 cents per share to 83 cents), it announced Monday.
Only for a giant like Microsoft could such a sum be considered “little,” but $60 billion is roughly 1.9% of Microsoft’s current $3.2 trillion market cap. The agreement renews an equally large buyback program from 2021, Bloomberg reported; during the fiscal year ending in June, repurchases totaled about $17 billion.
Not that investors aren’t confident in Microsoft’s future. Its share price had already risen 31% in the 12 months before Monday’s announcement, Bloomberg reported, “as investors bet on gains from its push into artificial intelligence,” including its early and continuing partnership with ChatGPT-maker OpenAI.
But even Microsoft has to offer investors something in the short term as they watch capital spending explode without bottom-line growth to match. Its capital spending, which was mostly on AI, increased nearly 78% year over year in Q4—and it pledged to increase that spending further in the current fiscal year—while Azure, its business cloud computing platform, grew more slowly, Reuters reported. Microsoft said Azure growth would pick up in the first half of 2025 (the second half of its 2025 fiscal year), according to another Reuters story.
It’s been a big year for big buybacks in Big Tech: Meta approved an additional $50 billion in February, and Alphabet announced in April that it would repurchase up to $70 billion. In early May, the king of buybacks entered the ring: Apple announced that its board had approved up to $110 billion in buybacks, breaking its own 2018 record for the largest-ever repurchase from a US company, Bloomberg reported.