Microsoft Corp (NASDAQ:MSFT) has unleashed an unexpected $60 billion new share buyback and hiked its quarterly dividend 10% from the first quarter.
The tech titan made the announcement late on Monday, saying the dividend of $0.83 per share would be paid on 12 December, two days after its annual shareholder meeting.
Back in July, Microsoft's fiscal fourth-quarter results were punished severely by the market, despite revenues and profits coming in ahead of Wall Street estimates.
However, revenue growth slowed at its Azure cloud business, while the company set out plans to ramp up spending on AI infrastructure, resulting in a 78% rise in capital investments.
Analysts at AJ Bell said the "share buyback juggernaut has moved into the fast lane" and that "investors love share buybacks... particularly 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," analysts added.
Microsoft shares are up 1.8% in premarket trading on Tuesday at $439.26.