Microsoft announces $60bn buyback, hikes dividend

Microsoft announced the launch of a share buyback of up to $60bn late on Monday, as it hiked its quarterly dividend.

The software firm announced a quarterly dividend of $0.83 per share, which is a 10% increase on the previous quarter. The dividend is payable to shareholders on 12 December.

The company also said its board of directors had approved a new share repurchase programme of up to $60bn. It has no expiration date and may be terminated at any time.

Russ Mould, investment director at AJ Bell, said the buyback was "a gigantic sum of money".

"While tech companies are increasingly paying more generous dividends to shareholders, their preferred method of deploying surplus cash is to buy back shares," he said.

"Share buybacks reduce the amount of shares in issue and boost earnings per share. In turn, a higher level of earnings per share can boost the market value of a business.

"Fundamentally, investors love share buybacks. They particularly love them when they are least expected, which is certainly the case for Microsoft. One might have expected the tech giant to spend all its surplus cash on AI-related investments, but it is clearly balancing the needs of the business with keeping shareholders happy."