Microsoft Raises Dividend 8%

Microsoft said Tuesday it will raise its quarterly dividend to 98 cents per share, up from 91 cents, beginning in December. The company previously raised its dividend by 10% a year ago. Microsoft’s stock was roughly flat in after hours trading.

The company’s move to return more cash to shareholders comes as it simultaneously balances growing spending on AI, with plans to spend $50 billion on capex this quarter alone, primarily to build new data centers to meet AI demand.

Still, Microsoft has also reported returns from its AI investments; it disclosed in July that it exceeded $100 billion in revenue from rentals of Azure cloud servers in the twelve months prior, and that it has more than 30 million paid subscriptions to its Copilot AI features for Office 365 applications, up from 20 million paying users at the end of the first quarter. Microsoft generated $20 billion in free cash flow in the June quarter, up more than $4 billion from the cash it generated in the first quarter but down 20% compared to its free cash flow in the second quarter last year.